Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — TECHNOLOGY

Machine Tools

Sir B. Rhys Williams: asked the Minister of Technology how investment by manufacturing industry on machine tools in the United Kingdom compares, according to information available to him from international sources, with similar investment in France, Germany, Sweden, Japan, Canada and the United States of America.

The Joint Parliamentary Secretary to the Ministry of Technology (Mr. Alan Williams): I would refer the hon. Member to the answer given to the hon. Member for Blackpool, South (Mr. Blaker) on 5th March.—[Vol. 797, c. 166.]

Sir B. Rhys Williams: Is the poor performance of one of Britain's key industries really in keeping with the Government's claim to have achieved an economic miracle?

Mr. Williams: It is difficult to draw meaningful comparisons in this matter. If the hon. Gentleman looks, for example, at the 1967 O.E.C.D. figure, at the G.N.P. and at the investment, he will draw a different conclusion. I do not want to draw invalid conclusions. I just do not support the hon. Gentleman's conclusion.

Mr. Hordern: asked the Minister of Technology if he is satisfied with the level of purchases of machine tools for use in domestic industry during 1969; and if he will make a statement.

The Joint Parliamentary Secretary to the Ministry of Technology (Dr. Ernest A. Davies): Machine tool investment in the United Kingdom during 1969 is estimated to be £145 million, which is about the same as the 1968 figures in current price terms. Within this figure there is rapid growth in the purchase of numerically controlled machine tools which have many times the productivity of conventional machines. Though these figures are encouraging there is room for further improvement.

Mr. Hordern: Is the Minister aware that in real terms this level of new orders at home is lower than in 1965 and 1962? Is he further aware that the level of capital investment per head was lower in the United Kingdom than in any other E.E.C. country? What measures does he propose to take to alter this situation?

Dr. Davies: It is true that in real terms there has been a levelling off and a slight fall in investment, but I remind the hon. Member that if we look at the machine capacity the very substantial increase in the proportion of numerically-controlled machine tools, with their much larger machine capabilities, remedies this situation to a large extent. As for the E.E.C. point, the latest report will show that in investment we are a little behind Japan and Germany, but in front of France. As for giving encouragement to investment, we are continually at work, through our various advisory services—through the Computer Aided Design Service, and so on—to persuade machine tool manufacturers to adopt the latest technologies and so increase their productivity.

Mr. Speaker: I remind Ministers that long answers usually mean fewer Questions.

Textile Industry (I.C.I. Proposals)

Sir B. Rhys Williams: asked the Minister of Technology if he will now announce the result of the investigation conducted by his department into the proposals by Imperial Chemical Industries Limited with regard to the textile industry.

Mr. Barnett: asked the Minister of Technology if he will make a statement on his policy regarding Imperial Chemical Industries' bid for Viyella.

Mr. Kenneth Baker: asked the Minister of Technology whether he has yet completed his study into the British textile industry; and whether he will make a statement.

The Paymaster-General (Mr. Harold Lever): I expect to make a statement on this matter soon.

Sir B. Rhys Williams: It is extremely disappointing, when the House has been led to expect a statement today, that the Minister is still vacillating. When will he make a statement on this important subject?

Mr. Lever: If the hon. Gentleman allows his expectations to be aroused by the newspapers instead of the sober and reliable comments of Ministers, he will get into this difficulty. The only statement that I have made is that I hope to be able to make a statement before the end of this month.

Mr. Barnett: I am equally sorry that my right hon. Friend is not yet ready to make a statement. Will he tell us under what legislation he expects to be able to enforce anything that he proposes to issue in his statement? How does he expect I.C.I. to be able to get below the 50 per cent. holding which some newspapers report him as wanting to see done? Is it open to foreign textile companies to bid for second-force textile companies?

Mr. Lever: I appreciate that my hon. Friend's supplementary question was prepared in the expectation that some newspaper comment might prove more reliable than it is. Nevertheless, I must tell him that I cannot reflect in public on the powers that I will have to enforce such proposals as I offer until those proposals are offered.

Mr. Baker: This is an anticlimax. We will have to overhaul the system of leaks. May I press the right hon. Gentleman to ensure that, if he is to make a statement before the end of the month, it is done while Parliament is sitting, because most of the days before 31st March are holidays?
Secondly, I hope that the Government's mind is still fairly open and that the leaks last week may be just myths.

Mr. Speaker: Order. Long questions mean fewer questions.

Mr. Lever: I hope that nothing I do will ever bring the system of leaks into disrepute.

Sir K. Joseph: As the Minister has presumably got into trouble in getting his recommendations accepted by his Cabinet colleagues, may I ask whether he will confirm that he will be making a statement in this House while Parliament is sitting?

Mr. Lever: I can add nothing to what I have already said—namely, that I hope to make a statement as soon as possible and, if at all possible, before the House rises. That is a matter on which I will do my utmost for the convenience of the House.

Sir K. Joseph: rose——

Mr. Lever: Before the right hon. Gentleman excites himself, he must not infer that I have had any difficulties on this or any other subject with my Cabinet colleagues.

Sir K. Joseph: On a point of order. The right hon. Gentleman in his answers to supplementary questions contradicted himself. He spoke, first, of making a statement "before the end of this month" and later "as soon as possible". In view of the importance of the statement being made to the House of Commons, surely it is right that the Minister should be asked to explain which he means.

Mr. Speaker: That is a point of argument rather than of order.

Mr. Lever: I was referring to a previous statement that I had made in answer to a Question in the House when I promised a statement before the end of the month. In today's statement I said that I expected to make a statement on this matter soon. That is all that I can say.

Aero-engine Development (Discussions)

Mr. Biffen: asked the Minister of Technology if he will make a statement on the latest position in the discussions currently being held with Rolls-Royce concerning loan financing for the development of aero-engines.

The Minister of Technology (Mr. Anthony Wedgwood Benn): The evaluation of Rolls-Royce's request for aid for


the RB211–50 engine is continuing and discussions with the company are well advanced.

Mr. Biffen: In view of the immense significance of this decision, ought not the Minister to give some indication to this House of the Government's thinking on the negotiations that they are having with Rolls-Royce? Will he indicate whether it is the Government's hope that whatever settlement is concluded will include a Government director on the board of Rolls-Royce?

Mr. Benn: I do not think that the latter part of that question arises on this proposal. The House is familiar with the thinking of the Department and of the Government on the launching of major projects—namely, that the market demand is a big, though not the dominant, factor in helping us to reach decisions.

Mr. Robert Howarth: Is my right hon. Friend prepared to say whether the difficulties of the Lockheed Company, on which Rolls-Royce depends so much, are in any way influencing his thinking?

Mr. Benn: It is generally known that there is already a possible application for the RB211–50 engine for the Lockheed long-range Tri-Star, and there are other possible applications. We are keeping a close eye on all potential development opportunities.

Exports (Mensforth Committee's Recommendations)

Mr. Biffen: asked the Minister of Technology if he will now make a statement on the Mensforth Committee recommendations concerning the quality and reliability of British exports.

Mr. Alan Williams: The Committee on Quality Assurance, under the Chairmanship of Sir Eric Mensforth, has not yet submitted its report.

Mr. Biffen: But is the hon. Gentleman aware that the recommendations have already been widely revealed and that they involve a totally needless extension of bureaucracy in the establishment of British quality abroad? To save us time spent in fretting about the matter, will the hon. Gentleman now say that this nonsense will be rejected by the Government?

Mr. Carmichael: On the last occasion tations on the report are still taking place, but no doubt the hon. Gentleman's rather animated contribution will be taken into account.

Car Industry (Research and Development)

Mr. Gwilym Roberts: asked the Minister of Technology if he will take steps to set up a national research and development organisation for the car industry aimed at reducing unit cost of car production by co-ordinating technological expertise, standardising parts between manufacturers and reducing unnecessary duplication of similar models; and if he will make a statement.

Dr. Ernest A. Davies: A good deal of collaborative research for this industry is carried out by the Motor Industry Research Association to which the Department makes a financial contribution. As manufacturers prefer to design their cars to meet market demand there is no need for further action.

Mr. Roberts: Does my hon. Friend accept that there are still too many similar models being produced, and that if parts from one manufacturer could be substituted for others this would greatly help our exports? Further, since we are still a long way away from the British car as such, would he not accept that any steps taken in this direction would be helpful to the industry?

Dr. Davies: On the second point, the fact that we import up to 10 per cent. of consumption on the home market indicates that the motorist requires this kind of variation in model type. I believe this would be true of the foreign market also. Secondly, the number of models produced by any manufacturer will in the end be determined by the market found by the manufacturer.

Buildings (Fire Resistance)

Mrs. Renée Short: asked the Minister of Technology what research is being carried out by his Department into fire resistance of single-storey and multistorey buildings, respectively.

Dr. Ernest A. Davies: Approximately 50 staff at the Fire Research Station are engaged on research concerned with the


fire resistance of buildings, and the cost of the work in 1969 was £160,000. The results are applicable to both single storey and multi-storey buildings.

Mrs. Renée Short: My hon. Friend has not answered the Question. What is being done to deal with the problem of single-storey buildings in which the majority of large fires appear to occur and cause the greatest amount of damage? These buildings are not covered by the building regulations about fire resistance.

Dr. Davies: The matter of building regulations is the responsibility of the Ministry of Housing and Local Government. The results of any research carried out and any tests of materials, such as doors and frameworks of buildings, carried out by the Fire Research Station are communicated to that Department.

BAC3-11 Aircraft

Mr. Onslow: asked the Minister of Technology if he will now make a further statement on the BAC3-11 project.

Mr. Cronin: asked the Minister of Technology if he will now advance the British Aircraft Corporation £75 million to help launch its BAC3-11 aircraft having regard to the recent further information he has received as to this aircraft's commercial merit.

Mr. Benn: The British Aircraft Corporation's latest proposals for the BAC3-11 reached me only a few days ago. The Corporation are asking for approximately £100 million of Government assistance, and I am not prepared to rush a decision on an investment of this size.

Mr. Onslow: Although the House will understand that the Minister does not wish to be rushed on this matter, is it too much to hope that the Minister will come to a decision before it is too late and make an announcement while the House is still sitting?

Mr. Benn: There is no question of my announcing a decision before the end of the week. I got these proposals last Tuesday and they involve a sum of £100 million. I will not be urged by the hon. Gentleman into actions of total irresponsibility.

Mr. Leslie Huckfield: In view of the large amounts of public money which have in the past been involved on this project, and which will obviously be involved in future, will my right hon. Friend say what further plans he has to extend the public sector and public ownership in this industry?

Mr. Benn: That raises a separate question. As the House knows, we have arrangements for the recovery by a levy on sales of money invested by the Government in aircraft projects. There are other possibilities, but I think I should not answer them at this moment.

Textile, Rubber and Plastic Waste Processes (Grants)

Mr. Blaker: asked the Minister of Technology whether he will now take the necessary steps to make processers of textile, rubber and plastic waste eligible for investment grants.

The Minister of State, Ministry of Technology (Mr. Eric Varley): Firms in these industries may qualify for investment grants on their new machinery or plant if the processes which they carry on result in an end product significantly different from the original waste materials. Firms whose processes are limited to the sorting or grading of waste materials do not qualify.

Mr. Blaker: Does that mean that processes involving these materials are eligible according to exactly the same criteria as apply to processes involving scrap metal and waste paper?

Mr. Varley: They are treated similarly, but firms whose processes are limited to sorting and grading of waste materials do not receive investment grants.

Manufacturing Industry (Investment)

Mr. Hordern: asked the Minister of Technology what is his latest estimate of the trend in investment by manufacturing industry in 1970.

Mr. Ridsdale: asked the Minister of Technology whether he will revise his estimate of the increase in investment in manufacturing industry in 1970, in view of the recent report from the Confederation of British Industry, details of which nave been submitted to him.

Mr. Blaker: asked the Minister of Technology what is his latest estimate of the effect on manufacturing industry's new investment of the current credit squeeze.

Mr. Speed: asked the Minister of Technology if he is satisfied with the current level of capital investment by manufacturing industry; and if he will make a statement.

Mr. Alan Williams: The investment intentions published on 13th January indicated that manufacturers were expecting their investment to rise in 1970 by about 10 per cent. in real terms: a satisfactory increase given other claims on resources, particularly those of exports. The forecasts were made by manufacturers in the light of the many factors affecting future economic prospects but it is not possible to isolate the effect on investment of individual factors. It would be premature to conclude from the recent C.B.I. survey that manufacturers have significantly altered their investment intentions.

Mr. Hordern: Does the Minister appreciate that the C.B.I. survey shows that the majority of manufacturers are content to spend less than they did last year, and bearing in mind the high rate of corporation tax, the high level of interest rates and the credit squeeze, from where does he think manufacturers will get the money?

Mr. Williams: Any doubt there may have been about the future of investments was probably expressed at about the time it looked possible that hon. Gentlemen opposite might end up in Government. As for the differences between the C.B.I. and the Government surveys, the C.B.I. works on authorisations, whereas we work on intended expenditure. In any case, the survey by the C.B.I. conflicts with known information from the chemical and steel industries.

Mr. Ridsdale: When will the Government make another review, in view of recent wage increases which far exceed increases in productivity?

Mr. Williams: Those factors are common to many of our competitors overseas. It is the relative marketing position

of the British product which will dictate the level of investment.

Mr. Speed: Are the Government in favour of the large current wage demands in the expectation that they will stimulate consumptiton so that that in turn will stimulate manufacturing investment?

Mr. Williams: That is not a question for my Department. So far as we are concerned, we still think that the economy is well in balance, as is demonstrated by the balance of payments figures.

Mr. Blaker: Has the hon. Gentleman observed from the Government's own figures that between January, 1966, when investment grants were introduced and the last quarter of 1969 investment in the distribution and service industries, which do not qualify for investment grant, has been twice as buoyant as investment in manufacturing industries?

Mr. Williams: The hon. Gentleman must know, after numerous questions both to myself and to the President of the Board of Trade, that questions or distribution are matters for the Board of Trade.

Hon. Members: Oh.

Mr. Molloy: Could my hon. Friend confirm on this question of investment that in 1966 the C.B.I. forecast a fall of 25 per cent. when in fact it was only 3 per cent.?

Mr. Williams: I thank my hon. Friend for reminding me of that fact. It was suggested at one time that this might have been due to the fact that during that year the extra 5 per cent. for investment grants was introduced. That is a notable tribute to the impact of investment grants.

Sir K. Joseph: But, objectively speaking, is it not true that the C.B.I. forecasts have been more realistic than the Government's forecasts?

Mr. Williams: The right hon. Gentleman has always shown a marked partiality to support whatever set of forecasts are politically most suitable to him at any given time. In view of his complete reluctance to base any decisions on investment on objective facts, and since he will not await a decision before doing away with investment grants, I am surprised that he has asked that question.

Sir K. Joseph: On a point of order. The hon. Gentleman did not answer the Question.

Mr. Speaker: That has happened before.

Mr. Williams: I still maintain that our figures tend to be more reliable—and 1966 showed that to be so.

Irish Sea (Natural Gas)

Mr. Pounder: asked the Minister of Technology what proportion of applications at present under consideration for exploration licences in the Irish Sea involves partnership with the Coal Board and the Gas Council, respectively; and if he will make a statement.

Mr. Alan Williams: In accordance with the announced criteria all applications for production licences in the Irish Sea provide for participation by either the Gas Council or the National Coal Board. Until consideration of the applications has been completed I cannot give further details.

Mr. Pounder: I thank the hon. Member for correcting my Question. Can he give the House any idea when we may expect an announcement. Will it be in one month, two months, or what?

Mr. Williams: I am sure that the hon. Member will appreciate that some very complex programming discussions have to take place with the companies. It is therefore difficult to give a precise prediction of the date, but we hope that it will be soon.

Neuclear-Powered Merchant Ship

Mr. Wall: asked the Minister of Technology if he will make a further statement on the construction of a nuclear-powered merchant ship.

Mr. Willey: asked the Minister of Technology whether he will make a statement on the cost estimates regarding the construction of a nuclear-powered merchant ship.

Dr. Ernest A. Davies: I made a statement in some detail about the present position to the House last Tuesday in a debate on the Adjournment. There is nothing more that I can say to the House at present that would be helpful.

Mr. Wall: I appreciate that this is basically a question of economic viability but, as the hon. Member is aware, the whole question has been under discussion for over 10 years. Can he say when he will be in a position to make a statement on the matter?

Dr. Davies: As I told the House on Tuesday night, we hope to have the result of this study coming forward very shortly. It will be brought before Ministers, and we shall then consider how best to bring it before hon. Members.

Mr. Shinwell: Can my hon. Friend assure the House that the Chamber of Shipping and the shipbuilding interests have been consulted? In addition, will he give an assurance that before the Government embark on any expenditure on this project they will ascertain what has been the experience of the United States of America and the Soviet Union in relation to it?

Dr. Davies: I can assure my right hon. Friend that all the interests to which he has alluded have been consulted and all the sources to which he has alluded have been carefully examined.

Concorde Aircraft

Mr. Wall: asked the Minister of Technology if he will make a further statement on the progress of the Concorde programme.

Mr. Sheldon: asked the Minister of Technology how much has now been spent on the research and development costs of Concorde.

Mr. Benn: Prototype 001 is now grounded for a number of planned modifications; 002 flew again on Saturday and will extend the flight test programme up to Concorde's cruising speed of Mach 2. Flights at this speed are likely to take place during the summer. About £410 million of the present basic development of £730 million has now been spent.

Mr. Wall: Can the right hon. Gentleman say when he expects the provisional orders for this aircraft to become firm orders, and also when the 002 will be carrying out her sonic boom trials over this country?

Mr. Benn: I cannot answer either question with absolute accuracy. The orders


will depend upon the manufacturers being able to provide performance guarantees, based upon the characteristics that emerge from the tests. I understand that the 002 is likely to go supersonic in the fairly near future, although this must not be taken to mean that the flights up the West Coast flight route will necessarily occur at the same time.

Mr. Sheldon: I appreciate the difficulty of communicating decisions to the House on international projects of this kind, but will my right hon. Friend note that it was disappointing that a number of decisions were taken before this House was notified? Will he make sure that he keeps up the standard of the rest of his Department and the rest of his work by notifying to the House decisions that are taken, when they are taken?

Mr. Benn: I shall do my best. I was criticised by the Select Committee on this matter, and I took this to heart. In the case of an international project, when everything must be agreed internationally at the working level and also at the Ministerial level, it is difficult to be as exact as it is in the case of projects under one's own control, but I am anxious to keep the House fully informed.

Mr. Ellis: Will my right hon. Friend use what influence he has with the Press in order that they may tell a consistent tale about this aircraft? This weekend has been "knock the Concorde" weekend; next weekend the Press will probably be enthusiastic. The Press seems to vary between the two extremes. Many of my constituents in Bristol have a vested interest in this project, and the Press causes them undue alarm when it launches into forays of this kind.

Mr. Benn: Ministers have no influence on Press treatment of matters of this kind. The more that we can put out to the Press and the more material it is given the less inclined will the Press be to put out sensational and unfavourable comment.

Mr. Biffen: How soon will it be before the Minister has sufficient data to enable him to come to a decision whether or not this is a viable economic project?

Mr. Benn: It is very difficult to say, but I would expect that during the course of this year we shall have far more information, based upon the flight tests at

Mach 2. When these are completed and the manufacturers know the characteristics they should be able to make these known to possible customers, and it is at that stage that we hope the options will be converted into orders. I cannot put a specific date upon that transformation.

Mr. Onslow: asked the Minister of Technology when Concorde will make a trial landing and take-off at London Airport, Heathrow.

The Joint Parliamentary Secretary to the Ministry of Technology (Mr. Neil Carmichael): There are no plans for Concorde to make a trial landing and take-off at Heathrow. Concorde is, however, likely to use Heathrow during its programme of route proving and endurance flying. This will probably not start before 1972.

Mr. Onslow: What environmental studies are being made of the noise problems which Concorde is likely to create on approach, take-off and ground running? Does the hon. Gentleman understand that these are very relevant to its acceptability at Heathrow and to the question of the siting of the third London Airport?

Mr. Carmichael: Certainly these are very important questions. Many studies are going on into the effects of the sound which the Concorde will create on landing. We do not expect that they will be any more than the present subsonic jets when the proper engines are fitted. At present, the prototype engines which were put in it for the test runs are not the engines which will be used for landing and take-off at international airports.

Mr. Pardoe: asked the Minister of Technology if he will estimate the additional passenger fare necessary to cover Concorde's running costs as a percentage of the present economy fare; and what research his Department has carried out into potential passengers' willingness to pay it.

Mr. Carmichael: The level of surcharge is for the airlines to decide in the light of the traffic they believe Concorde will attract and their judgment how Concorde can most profitably be operated. All the Department's studies suggest that passengers will be prepared to pay a substantial premium to travel by Concorde.

Mr. Pardoe: Bearing in mind that the development costs of the Concorde, now standing at £730 million, have increased five-fold since 1962, can the Minister say what proportion of the development cost he intends to get back for the Government in the fares he is talking about?

Mr. Carmichael: This will depend on just how many sales of the Concorde are made. While there may have been a case at one time for criticising the Concorde, I think that now that it is flying we should recognise it as a very great Anglo-French technological achievement.

Mr. Brooks: My hon. Friend cannot realistically talk about the number of aeroplanes that will be sold until we have an approximate idea of the price at which the Concorde will be offered. Since the price is bound to depend on the size of the levy which we hope to impose to recoup R & D costs, now is the time to know the Department's views on the proportion we should recoup.

Mr. Carmichael: That is hardly a question that can be fully evaluated while the tests are still going on. We must find out how acceptable the Concorde will be to the airlines after the tests. I have no doubt that it will be very acceptable. It will be an aeroplane that will increase their revenue, but we cannot tell them that until we can tell them the findings of the tests.

Motor Manufacturing Companies (Capital Investment)

Mr. Speed: asked the Minister of Technology what recent consultations he has had with the managements of motor manufacturing companies about their plans for capital investment in the United Kingdom; and if he will make a statement.

Mr. Benn: I keep in very close touch with the managements of the motor manufacturing companies and they give me a great deal of information about their future plans, on the basis of absolute confidentiality.

Mr. Speed: Does the Minister realise that unless confidence in the motor industry is restored very soon its investment programmes from 1972 onwards will be gravely jeopardised?

Mr. Benn: Everybody recognises the relationship between the home market

and expansion plans, but I hope that the hon. Member will not suggest that exports do not provide a basis for further growth. The latest published figures suggest that the home market is beginning to pick up.

Space Launchers

Mr. Marten: asked the Minister of Technology what discussions he has had with the Japanese about space launchers.

Mr. Carmichael: None, Sir.

Mr. Marten: Can the Minister say why the Japanese can have a national space launcher programme while the British Government choose to rely entirely upon American space launchers? As we have the capability to carry out this observation, is not this policy painfully short-sighted?

Mr. Carmichael: Some misleading articles have appeared on this question. The Japanese Lambda launcher launched a satellite with a payload of 26 kilograms, whereas our Black Arrow is capable of launching a satellite with a payload of 100 kilograms. A strict comparison of the two cannot be anything but misleading.

Mr. Lubbock: Will the hon. Gentleman make inquiries of the Conservative Party about the additional expenditure it intends to allocate to space research if it gets into office?

Mr. Carmichael: There is a Question down concerning the cost of the British space programme, and if it is reached it will be interesting to obtain information from hon. Members opposite as to the cost of their programme.

Motor Manufacturing Industry (Production)

Mr. Gwilym Roberts: asked the Minister of Technology if, with a view to guaranteeing the long-term growth and development of the British motor manufacturing industry, he will take steps to counter any major contraction of car or commercial vehicle production in Great Britain by international companies by providing the machinery for Government action to take over underused capital assets of such contracting companies


and thus to maintain and expand the level of employment and production.

Mr. Benn: No such contraction is planned. Indeed, I expect further expansion.

Mr. Roberts: Would my right hon. Friend accept that anybody with a glimmer of sense would agree with him that international companies will not abandon their large capital assets in Britain? But does he also accept that the Government have a job to do to improve industrial relations in the industry—[HON. MEMBERS: "Hear, hear."]—it is their job, and will continue to be—by demolishing the type of blackmail which is sometimes put forward in this direction by one or two misguided manufacturers and some Tory politicians?

Mr. Benn: That goes a bit beyond the original Question. The international company is here to stay and, in my opinion, will grow rapidly, not only in the motor manufacturing industry, but in many others. Somehow we must, by maintaining close contact with them, see that their work is, in general, of benefit to the United Kingdom. I have no reason to doubt that the presence of international companies here is helping exports and employment.

Sir Ian Orr-Ewing: Is it not true that the industrial unrest in the motor industry, particularly in Fords, has led the American parent company to divert much of this work to German and other Continental plants, rather than undertaking it in this country?

Mr. Benn: The hon. Gentleman would be wrong to draw such conclusions. My own understanding is that, as these companies grow, they will increasingly develop their products across national frontiers. To draw the conclusion which the hon. Gentleman has drawn from that fact would he wrong.

Space Programme

Mr. Farr: asked the Minister of Technology what has been the total expenditure of Government money to date on Great Britain's space programme.

Mr. Carmichael: The total expenditure on national space activities since 1966, including estimated expenditure for the

current financial year, amounts to £56·6 million.

Mr. Farr: What have we to show for this vast expenditure?

Mr. Carmichael: As I said earlier, we have already had test firings of the Black Arrow. It is important to realise that the Government have considered space activities as a means to an end and not as an end in themselves. It is also important to recognise that we are co-operating with the other international bodies, in E.L.D.O. and E.S.R.O. and Intelsat, and that an additional £62·4 million is being spent on this. We have, of course, had a considerable success in satellite communications.

Mr. Palmer: Would my hon. Friend say that it is just possible that, in relation to the industrial capacity of the country, the British space effort is not as large as it should be?

Mr. Carmichael: Yes, but a decision was taken by the Government that the British space effort should be directed, as I said, to ends rather than means. We were concerned with the results of what we could put up rather than merely putting something up.

Mr. David Price: Would the hon. Gentleman not agree that the expenditure of this country over the last 10 years —this is across Governments—has suffered desperately from the lack of defined commercial and technical mission, and that we have dissipated the money, under both Governments?

Mr. Carmichael: That may have been so at one time, but we are trying to recover now and to see that what we put our money into is commercially viable. This is the point, perhaps, at which the question of the hon. Member for Orpington (Mr. Lubbock), on Question No. 21, could be answered. If we went into the space field in a really big way, the costs would be quite out of keeping with our industrial potential.

Industry (Plant Capacity)

Mr. Hall-Davis: asked the Minister of Technology (1) if he will publish for each major sector of manufacturing and process industry twice each year the percentage utilisation of plant


capacity and the estimated utilisation one year ahead;
(2) what action he is taking to identify the sectors of industry where plant capacity is limiting output.

Mr. Alan Williams: The Department takes all action that is considered appropriate to identify any sectors of industry where plant capacity may be limiting output. There are no plans for the publication of the information requested.

Mr. Hall-Davis: Are there not signs that industry now has its capacity finely adjusted to the present level of demand and to the slow growth rate of recent years? Is there not a risk that we shall shortly be facing a capacity crisis?

Mr. Williams: I would not accept that proposition, but we do watch closely all the indicators which we receive from industry. We keep in close touch with those industries which we sponsor as a Department.

Mr. Maclennan: Would my hon. Friend resist any suggestions from industry that shortage of plant capacity can be tackled by the Government relaxing their I.D.C. policy, in view of the essential contribution which this is making to regional development?

Mr. Williams: I am sure that my hon. Friend is right to stress the importance of regional policy. We are well aware, from the utterances which we have heard, how that policy would be watered down by hon. Gentlemen opposite.

Natural Gas (Inquiry)

Mr. Barnett: asked the Minister of Technology when he expects to receive the report of the independent inquiry into north sea gas conversions; and if he will make a statement.

Mr. Harold Lever: I asked Professor Morton to prepare his report as soon as possible consistently with making a thorough investigation, but am not able to estimate when this will be.

Mr. Barnett: I again thank my right hon. Friend for agreeing to the inquiry, and I am sure that all of us hope that the result will ensure that a great national asset will be used fully for the benefit of the public. Would my right hon. Friend stress to Professor Morton the need for

urgency in presenting this report, so that the public's genuine fears can be allayed? Meanwhile, is the disquiet about conversions being relieved in any way by any change in conversion procedures?

Mr. Lever: On the first part of that question, I asked Professor Morton to let us have the report as soon as possible, but of course, not at the expense of thoroughness. As to conversions, we are continuing the conversions and intensifying the effort to mitigate the inconvenience which these cause, temporarily, to consumers.

Mr. Emery: Would the hon. Gentleman confirm that this inquiry will look into the whole problem of conversions? Judging from the answer which the Parliamentary Secretary gave me the other day, that was not apparent from the terms of reference given to the professor. When this report is given to him, will the right hon. Gentleman make certain that it is published?

Mr. Lever: There is nothing ambiguous about the terms of reference. They made it absolutely apparent that they would cover not the whole field of conversions, but the aspect of safety. That is crystal clear from the terms of reference.

Sir J. Eden: Will there be any opportunity for individuals to give evidence to the professor during the inquiry? Despite his last answer, would the right hon. Gentleman reconsider the possibility of widening the scope of the inquiry, so that those who are really concerned about the conduct of the conversion operation have a chance to put their case?

Mr. Lever: This was to be an inquiry into all the safety aspects of natural gas, and I see no reason to widen the terms of reference. They are wide enough and could not be clearer. As to giving evidence, that is a matter for the professor himself to decide, although I do not doubt that he would want to enjoy an opportunity of having any relevant evidence, orally or in writing, as he may determine.

European Telecommunications Satellite

Mr. Marten: asked the Minister of Technology if he has yet received the


report of the Working Group for a European Telecommunications Satellite; and if he will make a statement.

Mr. Carmichael: A copy of the final draft was received recently. The report is now being evaluated by the European bodies concerned, and until this has been done, we shall not be in a position to make a statement.

Mr. Marten: While disagreeing with part of the remarks of my hon. Friend the Member for Eastleigh (Mr. David Price) earlier, may I ask whether the Government agree with the proposal for a 500 kilogram communications satellite to be launched by a Europa III launcher?

Mr. Carmichael: The United Kingdom has declared its willingness in principle to participate in the programme, but until the final report has been produced and evaluated, and necessary information has come from certain bodies, like the European Conference on Posts and Communications and the European Broadcasting Union, no decision can be taken, except in principle.

Mr. David Price: In making its evaluation, will the Department study the admirable report of the hon. Member for Eastleigh presented to the Council of Europe about 10 years ago and supported unanimously by that body? Does the Minister agree that that report remains absolutely right, and that if Governments had followed it we should be in a better position in space now?

Mr. Carmichael: I am pleased that the hon. Gentleman has given me a reference to that report. I am sure that it will be looked at when the full report is studied.

Investment Grants

Mr. Sheldon: asked the Minister of Technology when he expects to receive the results of the study of the effectiveness of the investment grant scheme.

Mr. David Howell: asked the Minister of Technology by what date he now estimates that his Department's investigation of the effectiveness of investment grants will be completed and published.

Mr. Varley: I hope that the study will be completed by the end of the year.

The question of publication will be considered when the results are available.

Mr. Sheldon: I am sure that it is the wish of the House that the information should be published in full for the benefit of all. Does my hon. Friend accept that there is no need for any delay in making certain changes to the investment grant scheme during the period we are waiting for the report? Can he confirm that there is evidence that changes in the amounts of the grant possibly affect investment decisions even more than the level of the grants? Will he go into that matter as well?

Mr. Varley: The question of a study is a complex matter, as my hon. Friend understands. It must take into account all the factors that affect profitability of investment and influence businessmen's investment decisions. I must ask the House to be patient.

Mr. Howell: Does the Minister recall that it is well over a year since the study was first announced and that in the meantime investment grants have gone spiralling upwards while manufacturing investment has not? There is growing evidence of a widespread waste of public money in this programme, and it is high time the report was produced—not at the end of the year, but now.

Mr. Varley: I cannot accept that there is widespread waste in the investment grant system. I am sorry that the programme has slipped a little, but we hope to get the report out by the end of the year.

Mr. Blenkinsop: Is my hon. Friend aware that very grave damage is being done to possibilities of industrial development in our development areas because of the injudicious remarks from the other side of the House about the security of investment grants?

Mr Varley: I agree that some of the ill-judged statements by hon. Members opposite and Opposition spokesmen about the matter calling this into question affect businessmen's investment decisions and create a great deal of harm.

Mr. Blaker: Will the Minister now answer the question his hon. Friend notoriously failed to answer a moment ago? How is it that since investment grants were introduced in 1966 the


buoyancy of investment by manufacturing industry in real terms has been half that of investment in the distributive and service industries?

Mr. Varley: The question is about the study. I have explained that it is going ahead and that the questionnaires have been sent out. I must ask the House to be patient.

Sir K. Joseph: Will the Minister accept that if any changes are made by the next Government—the Conservative Government—they will, as my right hon. and hon. Friends have always stressed, be in no way retrospective?

Mr. Varley: I think that that came out loud and clear in the right hon. Gentleman's article in the Spectator. For the very first time we heard from the Opposition that they acknowledge that investment grants are no more expensive than investment allowances. I think that that also came out very clearly, and we are very pleased to have it from the right hon. Gentleman. There is still a basic difference here on the Opposition Front Bench, and it is about time the right hon. Gentleman and his right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) got together on the matter and straightened it out.

Upper Clyde Shipbuilders

Mr. Edward M. Taylor: asked the Minister of Technology if he will make a further statement on the progress being made by Upper Clyde Shipbuilders.

Mr. Benn: I understand that the company is finishing off as quickly as possible the sophisticated and other nonstandard ships it has under construction and has recently announced a number of new orders for standard merchant ships. Management arrangements are being improved. As a result of these developments, discussions have been opened with the trade unions about arrangements for reducing the labour force by 3,500 rather than 2,600 agreed last summer.

Mr. Taylor: Does the right hon. Gentleman agree that considerable progress has been made towards the targets planned at the time of the last Government intervention? Can he confirm that there is a need for a demonstration by all involved in the project of the maximum

responsibility and flexibility at times of difficulty like the present?

Mr. Benn: I have no reason to believe that the people working in Upper Clyde Shipbuilders have not been very well aware of the need to co-operate. All my experience of them has been of their readiness to do so.

Mr. Rankin: During the last fortnight I have had the opportunity to meet both management and the chief shop stewards to discuss the problems facing Upper Clyde Shipbuilders today, particularly the reduction in numbers employed. I am sure that my hon. Friend realises that reducing a labour force at any time is a very difficult and tender job. I hope he will attain his end, keeping that in mind, and that production on Clydeside will go ahead.

Mr. Benn: I recognise the difficulties, but I think that my hon. Friend will know that with the support given by the Government to Upper Clyde Shipbuilders there is a very strong case for continuing the move towards greater productivity by this and other means.

Sir K. Joseph: May I take it from the right hon. Gentleman's answer that there has been no need for the Government to give any completion guarantees, or have any been given?

Mr. Benn: No completion guarantees have yet been given. I should be interested to hear the right hon. Gentleman's view on Upper Clyde Shipbuilders.

Sir Ian Orr-Ewing: On a point of order. Increasingly we notice at Question Time that questions are put to Her Majesty's Opposition. This is not a part of Question Time. Would you, Mr. Speaker, rule that questions should be answered where Ministerial responsibility rests and should not be flung across the Floor of the House? They never have been in the 20 years I have been here, and I am sure that the Ruling has not changed.

Mr. Speaker: Order. I have noticed that interesting phenomenon, but it is not new.

Mr. Russell Kerr: On a point of order.

Mr. Speaker: Order. Points of order take up Question Time.

Mr. Kerr: Is there any means whereby the House can protect itself from the attempts of the hon. Member for Hendon, North (Sir Ian Orr-Ewing) to usurp your position, Mr. Speaker?

Mr. Speaker: Order. That is not a point of order.

Mr. Small: Is my right hon. Friend likely to pay an early visit to the Clyde?

Mr. Benn: I have no plans to go to the Clyde. With regard to the point of order of the hon. Member for Hendon, North (Sir Ian Orr-Ewing), I have never thought that there was any responsibility on the Opposition Front Bench.

Gas (Prices)

Mr. Edward M. Taylor: asked the Minister of Technology if he will take steps to identify the reasons why the price paid by domestic consumers of gas in Scotland was 23 per cent. above the average price in England and Wales in 1968–69; and what estimate he has made of the extent to which natural gas supplies will reduce this differential.

Mr. Harold Lever: This was due to differences in the underlying costs, arising principally from the different geography and patterns of consumer distribution, housing development and consumption. Because England and Wales are receiving natural gas ahead of Scotland the differential is likely to increase at first, but should begin to fall thereafter.

Mr. Taylor: Can the right hon. Gentleman confirm that natural gas will be supplied to Scotland at the same price as to other areas? To what extent does he think that that will contribute to reducing the large differential of 5s. in the pound, which the Minister admits will increase?

Mr. Lever: When Scotland gets natural gas, it will get it in bulk at the same price as other regions, but the underlying costs of distribution will have to be taken into account in the final price. I think that there will be some reduction in differential, nevertheless, when natural gas comes to Scotland.

Industrial Reorganisation Corporation

Mr. Kenneth Baker: asked the Minister of Technology how much the Industrial Reorganisation Corporation

has invested in British industry since 1st January, 1970.

Mr. Benn: No investments have been made so far this year.

Mr. Baker: May I express the hope that this excellent record will continue throughout 1970 because is it not a fact that of the 18 major investments made by the I.R.C. no fewer than 14 of the companies concerned are now earning a lower return on capital employed than before the corporation made its investment?

Mr. Benn: I can only say that the hon. Member's scornful references to the I.R.C. are not shared by those in industry who have worked with it.

Mr. Barnett: Will my right hon. Friend ignore the sort of comments we hear from hon. Members opposite, because one can look at figures the other way round, such as profit forecasts for A.E.I. before the I.R.C. and G.E.C. came on the scene, and then look at the return on capital before and since? But will my right hon. Friend promise that the corporation will not help the private airlines with money in order to keep them out of the hands of B.O.A.C.?

Mr. Benn: The airlines fall within the responsibility of my right hon. Friend the President of the Board of Trade.

Motor Vehicles (Pollution-free Engine)

Mr. John Pardoe: asked the Minister of Technology what discussions he has had with representatives of the British motor industry about the development of a pollution-free engine; and what financial aid is being given by his Department towards the cost of such development.

Dr. Ernest A. Davies: The Department frequently discusses the reduction of exhaust pollution with the motor industry. It gives the industry general help by means of its annual grant to the Motor Industry Research Association, and is also supporting the development of batteries for electric cars.

Mr. Pardoe: Is the Minister aware that both the President of the United States and the President of General Motors, whose policy on this matter is as one, have called in America for the development of a pollution-free engine within


five years as a time limit? Will he now state a time limit for the British industry?

Dr. Davies: I think that it is impossible to develop a motor car engine which is totally pollution-free, but what can be done at a cost of about £20 or £30 is to develop the technical aspects of an existing engine in order to meet the present Federal regulations in the United States of America.

Handley Page Aircraft Ltd.

Mr. Goodhew: asked the Minister of Technology (1) why all Government contracts with Handley Page Aircraft Limited were transferred to Hawker Siddeley Limited on Monday 2nd March;
(2) why he did not sign contracts with Handley Page Aircraft Limited for the conversion of Victor bombers to refuelling tankers before the appointment of a receiver.

Mr. Michael McNair-Wilson: asked the Minister of Technology what alternative arrangements he is making for the conversion of Victor bombers to the tanker role, in view of the going into liquidation of Handley Page Aircraft Limited.

Mr. Corfield: asked the Minister of Technology if he will make a further statement in regard to the contract between his Department and Handley Page Limited for the conversion of Victor bombers.

Mr. Dalyell: asked the Minister of Technology if he will make a statement on his actions in relation to Handley Page.

Mr. Carmichael: I have nothing to add to what I said in the Adjournment debate on 12th March, 1970.—[Vol. 797, c. 1696–708.]

Mr. Goodhew: Is not the Minister aware that a great deal of harm was done to Handley Page Aircraft Limited by the delay in awarding the Victor bomber tanker conversion contract; and that had it been granted last summer, something might have been done? Why were the Government so quick to write off the firm, and not so quick to do something to preserve it?

Mr. Carmichael: On the last occasion I answered the hon. Gentleman's question and other questions very fully, and the hon. Gentleman then agreed that it was dependent on the two factors, one being the conversion programme and the other, Jetstream, and that if one could not be operated successfully the other could not stand on its own. The contract could not be let until the Government were assured that Handley Page design and design capability could handle the contract. The pre-studies for the design were all covered by contract, but we had not received the final costs from Handley Page when the receiver went in.

Mr. McNair-Wilson: Can the Minister say what delay the liquidation of Handley Page Aircraft will cause in the programme of the conversion of the Victor bomber into the tanker rôle, and what delays it will mean in getting those aircraft into service with the R.A.F.?

Mr. Carmichael: This delay will be minimised. Handley Page Aircraft Limited was in liquidation last October, but at that period contingency planning had taken place, and Hawker Siddeley had been questioned about the possibility of its taking over. Therefore, when Handley Page Aircraft Limited went into liquidation these contingency plans were made with Hawker Siddeley and there should be the minimum delay because of the transfer to Hawker Siddeley.

Mr. Corfield: As this is a serious defence requirement, can the Minister tell us whether there is now a firm contract with Hawker Siddeley and whether he is satisfied that the firm has all the facilities available either at Radlett or elsewhere to carry out the contract with the utmost speed?

Mr. Carmichael: We are sure that Hawker Siddeley has all the facilities, and we believe that as the contract has gone to a firm of the size and type of Hawker Siddeley there will be the minimum delay compatible with this type of job. The final contract has not been let, but we hope that it will not be very long before it is.

Mr. Raphael Tuck: Is the uneconomic course to be pursued of sending the work to Woodford, near Manchester? What is to happen to the 2,800 employees in respect of superannuation, holidays with


pay and all the other moneys they were owed when the firm went into liquidation?

Mr. Carmichael: The extra cost of moving the work should not be exaggerated. On the question of the position of those who were working at Handley Page Aircraft Limited, I and my hon. Friend the Under-Secretary of State for Employment and Productivity last week met two groups of representatives of the workpeople, and with them we went through many of the points that my hon. Friend has raised. I think that we were able to reassure them on many of the points, but some of them, unfortunately, are matters for the receiver to handle.

Dounreay (Reactors)

Mr. Maclennan: asked the Minister of Technology what was the value in sterling of research work undertaken under contract by the Atomic Energy Authority in the Dounreay fast reactor in 1967, 1968 and 1969.

Dr. Ernest A. Davies: The income earned from undertaking irradiation of materials in the Dounreay fast reactor in the calendar years 1967, 1968 and 1969 was £160,000, £210,000 and £860,000 respectively. In addition, a further £40,000 was earned in 1969 from post-irradiation examination work. This income was all in foreign currency.

Mr. Maclennan: Will my hon. Friend agree that this has been a most useful exercise by public enterprise in helping our export drive and can he give any prognosis? Does he expect that the work will continue, or that international competition may reduce its volume?

Dr. Davies: I am grateful to my hon. Friend. This is certainly an example of public enterprise going into a new market and being very successful in penetrating it and developing its potential. The figures for the earlier years were depressed by the shut-down of the reactor for leak testing, but the present figures for this year show an increase that we hope will continue.

Mr. Maclennan: asked the Minister of Technology if he will make a statement on the progress of the work on the prototype fast reactor at Dounreay.

Dr. Ernest A. Davies: Progress is continuing satisfactorily, and this suggests it should be possible to complete the P.F.R. by the end of 1971, and the reactor should be on power by the end of 1972.

Mr. Maclennan: Can my hon. Friend say for how long he expects it will be necessary to retain the Dounreay fast reactor in commission to back up the work on the prototype?

Dr. Davies: I am afraid that I could not give an estimate of that period of time without prior notice.

Dungeness B Advanced Gas-Cooled Reactor

Mr. Lubbock: asked the Minister of Technology what is now the expected commissioning programme of the Dungeness B advanced gas-cooled reactor.

Mr. Harold Lever: The C.E.G.B. has advised me that commercial operation by 1972 is no longer possible, but I will inform the House of the revised date when the C.E.G.B. has completed its study of this matter.

Power Stations (Fuel)

Mr. Lubbock: asked the Minister of Technology if he will circulate in the OFFICIAL REPORT a list of power stations in respect of which the Central Electricity Generating Board has applied for consent to convert from coal firing to oil firing; and if in each case he will give the distance from the nearest existing or projected pipeline belonging to the Gas Council, in kilometres.

Mr. Harold Lever: The only outstanding case is Tilbury B, which is about 2·5 kilometres from a projected Gas Council pipeline.

Mr. Lubbock: As the combustion of natural gas would be pollution-free and as Tilbury is heavily built-up, may I ask the right hon. Gentleman to instruct, or request, the C.E.G.B. to investigate the use of natural gas in place of oil, and calculate the effect on the balance of payments that would ensue from the use of gas instead of oil?

Mr. Lever: The application is for conversion to oil, but I will certainly take


into account all the relevant wider social considerations in coming to a decision.

Mr. Palmer: But would not my right hon. Friend agree that we have now reached the time when the nationalised electricity supply industry should be free to purchase natural gas just like any other consumer?

Mr. Lever: That aspect may be very relevant at some point, but the board has not made any application to buy natural gas in relation to this power station

Vertical Take-off Aircraft

Mr. Michael McNair-Wilson: asked the Minister of Technology whether his Department has now evaluated the various vertical take-off civil aircraft proposals submitted to it by manufacturers; and if he will make a statement.

Mr. Carmichael: The evaluations will continue for several months.

Mr. McNair-Wilson: Is it the Government's intention to go ahead with an all-British vertical take-off aircraft, or are we involved in plans with any other European countries?

Mr. Carmichael: Because of the project's very great expense and the necessity for its being inter-European, at least in respect of the network, the probability, not the possibility, is that it will be done in co-operation with other Governments.

Ford Motor Company

Mr. Booth: asked the Minister of Technology if he will request the Industrial Reorganisation Corporation to assist the development of the Ford Motor Company so as to avoid the transfer of work on the Ford Escort to the Saarlouis plant in Germany.

Mr. Benn: No, Sir. I am not aware of any difficulty being experienced by Ford in obtaining funds for expansion.

Mr. Booth: Is my right hon. Friend aware that this is not a question of funds but of the development policy of the Ford Motor Company in Europe, which at present is under German control, and that control has already resulted in a large amount of passenger vehicle design work being transferred to Germany?

Mr. Benn: It is difficult in a short answer to answer the points made by my hon. Friend, but if we look over the last seven years we find that Fords have spent £280 million capital in this country and exports of £123 million in 1960 rose to £260 million last year. I do not think that bears out the suggestion made by my hon. Friend.

TELECOMMUNICATIONS (FINANCIAL PROSPECTS)

The Minister of Posts and Telecommunications (Mr. John Stonehouse): In consultation with the Post Office I have been reviewing the financial prospects of the telecommunications business, and I will, with permission, make a statement.
Post Office telecommunications is a profitable and rapidly expanding business. Use of the system is growing at more than 10 per cent. per annum, while new technologies are being increasingly and extensively applied. Demand for new telephones is now running at 37 per cent. up on last year. Thus the system is making, and will continue to make, exceptionally heavy demands on investment resources and Exchequer finance: investment needs over the next five years will exceed £2,500 million.
The Government consider that a greater proportion of this heavy capital investment can and should be financed from internal resources. We also have had regard to rates of interest and levels of return on capital now prevailing in the private sector. Accordingly, the Government propose, in agreement with the Post Office, to increase the financial target for telecommunications from 8½, per cent. to 10 per cent. from next July. This will lift the rate of internal financing from 34 per cent. to 52 per cent. over the next five years.
In order to meet this higher rate of return tariff increases will be necessary which the Post Office will be discussing with the Post Office Users' National Council. Before they are put into effect, the Post Office and I will, of course, consider carefully any representations which the council may wish to make.
Details of the proposed tariff increases will be published by the Post Office as soon as can be arranged, and I will then place them in the Library.

Mr. Bryan: Is the Minister aware that this forecast increase in charges will be a great shock to the public, coming as it does only 18 months after the last increase in the telephone tariffs, and at much the same time as increases in postal charges which may well be up to 3d. on both classes of letter post?
Secondly, as the right hon. Gentleman is unable to give details of the increased telephone tariffs, can he give the House the total income which will be required to cover both this extra high profit target and increases in wages negotiated since the present tariffs were fixed?
Lastly, is the right hon. Gentleman aware that the public are already highly dissatisfied with the telephone service as it is? Can he give them any assurance that they will get better service for the extra money they are asked to pay?

Mr. Stonehouse: This is not the time to anticipate increases in postal rates. I certainly do not intend to be drawn on the first part of the hon. Member's question.
On the second part, the amount that should be raised by increased charges to meet the increased target needed is about £65 million a year.
On the third part, it is certainly the case that the Post Office service is not as good as we would like it to be. The Post Office is very anxious to improve it. This is why an unprecedentedly high investment programme has been adopted. This is in sharp contrast to the period when the Conservatives were in power, when the Post Office was starved of funds. We have been making up during recent years for those years of neglect. We intend that the good work of investment in the best communications system in the world should be continued. That is why I have made this announcement today.

Mr. Golding: Is my right hon. Friend aware that a study published in September last year by the Consumers' Association demonstrated that only one of nine major telephone countries, Norway, had lower charges than the British telephone service? Is he aware that workers in the telephone industry are very anxious that the investment which is required to back up the great technical advances which have taken place in this country should come from the public rather than from private investment?

Mr. Stonehouse: I am grateful to my hon. Friend. I absolutely agree with him on the second part of his question. It is more likely that through public investment we shall be able to build up the sort of service that we require in Britain.
I also agree on the first part of my hon. Friend's question. Even with the increased charges which my statement implies, this country will still have among the lowest rates in the world.

Mr. Lubbock: Is the right hon. Gentleman aware that in saying that the Post Office service is not so good as he would like it to be he was giving the House a masterly understatement? Is he aware that over 800 people in the Orpington exchange area alone are at the moment waiting for a telephone? Is he further aware that so long as the Post Office remains a monopoly no test of efficiency can be applied and that raising the target return on capital does not mean that the Post Office will become more efficient? So will he favourably entertain applications by other organisations, such as those by the B.B.C. and data industries, for data transmission systems of their own?

Mr. Stonehouse: Many firms are involved in competition. It is certainly not the case that it would lead to greater efficiency if parts of the Post Office services were hived off as suggested by the hon. Member. That would lead to inefficiency and additional costs. I think that we can be satisfied that the Post Office, bearing in mind all the services it provides at rates among the lowest in the world, is doing a first-rate job. We should pat it on the back and not continue to carp against it for minor deficiencies which I acknowledge, and which this statement is designed to put right.

Mr. Alan Lee Williams: How much does my right hon. Friend think the increased telephone charges will be, and does he think that he should refer the matter to the Prices and Incomes Board?

Mr. Stonehouse: I cannot anticipate what the exact rates of the change will he. This is the responsibility of the Post Office. This is what it is putting to the P.O.U.N.C. As I have said, I shall arrange for the details to be made available to the House as soon as possible.

Mr. Maudling: Is the right hon. Gentleman aware that one aspect of his statement was very depressing and, I think, will be of no help to the Post Office? He referred to a need for a higher rate of return and then implied that the only possible source was higher tariffs. Why did he make no reference to greater costs and greater efficiency? What would have happened if a private firm had tackled this question on that basis?

Mr. Stonehouse: The Post Office is already showing increased efficiency in this field. Productivity has been going up by 8 per cent. a year and we have been able to have a very efficient use of manpower that matches most of the other administrations. We should be proud of what has been achieved. Certainly, what the Post Office has achieved is very much better than what has been achieved in many private firms.

Mr. Dickens: Is my right hon. Friend aware that his statement is a very good example in contemporary times, when people are talking about wage explosions, of the necessary increase in tariffs caused for reasons quite unconnected with wages and salaries, namely, increases in the cost of capital?

Mr. Stonehouse: That, I think, is correct. It is the case that the recent increases negotiated for the staff employed in this part of the business will be more than made up by increases in productivity in which the men concerned are co-operating.

Sir Ian Orr-Ewing: Is the Minister aware that in overseas countries post offices are much readier to receive modern peripheral equipment attached to the telephones? Will we in Britain be a little more forthcoming now, because this is a useful revenue earner and provides facilities to the consumer that other countries already have?

Mr. Stonehouse: The Post Office, whose responsibility this now is, is very keen indeed to examine any way by which service to the consumer can be improved. I will draw this point to the attention of the Post Office, but I must stress that it is now the responsibility of the Post Office.

Mr. English: Does the target of 10 per cent. relate to telecommunications alone, as that side of the Post Office has been making a huge profit and thus subsidising the mail side, which presumably it will continue to do? Second, how much of this capital investment will be devoted to improvement of the service rather than to the mere extension of an existing service?

Mr. Stonehouse: The telecommunications side of the business has not been subsidising the posts. The post has made a return on investment and it has a separate target which it does its best to meet.
The capital investment will be applied to allowing expansion to take place, to meeting the growing demand for new phones, and to helping to improve the system.

Mr. Mawby: Does not the right hon. Gentleman realise that in view of the need for a tremendous amount of capital, it is a satisfactory way of proceeding in the future to allow large private consumers to make their own arrangements and therefore reduce the need for the Post Office to raise large amounts of capital?

Mr. Stonehouse: I am not satisfied that this would lead to increased efficiency. I do not think that the country generally would believe that following the doctrinaire ideas expressed from the other side of the House would be a good way to deal with this business.

Mr. Milne: Will my right hon. Friend have a closer look at the costs of the equipment provided by private manufacturers and at the advertising done by the Department with a view to reducing costs in that direction as well?

Mr. Stonehouse: The bulk supply agreement has been cancelled and new arrangements which should lead to increased efficiency in procurement now take its place.
Advertising is the responsibility of the Post Office Corporation, but I am satisfied that the advertisements that it puts out are more than cost-effective.

Several Hon. Members: Several Hon. Members rose——

Mr. Speaker: Order.

NORTHERN IRELAND (MR. SAMUEL DEVENNEY)

Miss Devlin: On a point of Order. I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the unsatisfactory nature of the police inquiry into the death of Samuel Devenney, of Londonderry, resulting from an attack by members of the Royal Ulster Constabulary on himself and members of his family on 19th April, 1969.
In seeking leave, may I say that I appreciate that the incident to which I am referring took place on 19th April, 1969. Before stating the facts of the case, I want to state that I am not basing my request on the incident of 19th April, 1969, but on the recent occurrence—that is, on the unsatisfactory nature of the existing police inquiry.
If I may crave your indulgence, Mr. Speaker, it would be of help to yourself and to hon. Members in deciding this matter if I may be allowed to state the undisputed facts of the case for hon. Members who may not be familiar with them.
On 19th April, 1969, disturbances took place in Londonderry and a confrontation between the citizens of that city and the Royal Ulster Constabulary took place. Hon. Members will remember that this, and the behaviour in particular of the Royal Ulster Constabulary, formed the basis of a debate raised under Standing Order No. 9 on 22nd April by the hon. Member for Manchester, Blackley (Mr. Rose).
On that occasion, in Londonderry, Mr. Samuel Devenney was present in his own home with the members of his own family and with a neighbour who was visiting him at the time. Members of the Royal Ulster Constabulary, among whom there was at least one senior member who was identified by the fact that he was carrying the insignia of his rank—the blackthorn stick—forcibly entered the Devenney home and, during the course of events which took place there, beat Mr. Devenney himself and the neighbour until both were unconscious. Every member of that family was assaulted.
This resulted in hospital treatment for most of the members of the family, Mr.

Devenney receiving treatment for five head wounds and his neighbour receiving treatment for three head wounds. A child who had just been discharged from hospital following an operation was also severely beaten. On 17th July, 1969, Mr. Samuel Devenney died as a result of a number of heart attacks.
The facts of the case are simple. An inquest was held into the death of Mr. Devenney. The verdict returned originally was an open one. It is important for me to point out to hon. Members that in Northern Ireland, unlike in the rest of the United Kingdom, a jury at an inquest can return only an open verdict or a verdict of accidental death——

Mr. Kenneth Lewis: On a point of order. May I ask you, Mr. Speaker, whether this is a submission in the normal course or whether this is becoming a debate with a speech?

Mr. Speaker: Order. This is not a debate. This is a submission.

Miss Devlin: I would stress, Sir, that I am not stating either the merits or the demerits of this case. I am at this point stating the undisputed facts as recognised by the courts and the Parliament of Northern Ireland.
The inquest returned an open verdict. At first, the jury at the inquest asked what their powers were. They returned an open verdict. On the basis of the evidence before them and because of their inability to return anything other than an open verdict or one of accidental death, they were then directed to return a verdict of death by natural causes, because the immediate cause of this man's death was a heart attack.
Following that inquest and the inability of the jury to return any other verdict, an official complaint was lodged by members of the family to the police force, as a result of which District Inspector Faulker was authorised to conduct a police investigation. This investigation was, by the nature of the police force, necessarily conducted by a member of the Northern Ireland police force.
Although information was available to the members of the force, the results of the inquiry proved inconclusive. District Inspector Faulker had asked the district inspectors and head constables, being the members of the force who


carried the blackthorn stick, to present themselves for an identity parade. They exercised their right not to parade. Therefore, at no time was an opportunity given to the members of the Devenney family to identify the members of the police force who had been responsible for what had happened, although they claimed to be able to do so.
Following this investigation, a criminal injury claim was lodged by a number of the surviving members of the Devenney family.

Mr. Speaker: Order. With respect, the hon. Lady must come to the application she is making under Standing Order No. 9.

Miss Devlin: I am endeavouring to do so as briefly as possible, Sir. I am trying to emphasise that, as hon. Members are particularly uninformed about facts concerning Northern Ireland, it is necessary for the facts to be laid before them. I will as quickly as possible come to the application which is involved in this claim.
When the criminal injury claim was brought by surviving members of the family, the court stated that it would not be necessary to call police witnesses, as the Ministry of Home Affairs in Northern Ireland—it is important to note this point—admitted liability in a criminal injury claim; it therefore admitted that a criminal act had occurred. Members of the Opposition in Stormont endeavoured to bring the unsatisfactory nature of this inquiry before Parliament in Northern Ireland. A number of questions were asked of the Minister of Home Affairs. These were simply questions which would have helped——

Mr. Speaker: Order. With respect, the hon. Lady is doing what she would be right to do if her request for a debate under Standing Order No. 9 were granted. She is asking for an emergency debate. She must address her argument to that issue.

Miss Devlin: I shall try to relate these facts to the three basic points laid down in Erskine May which allow a debate under Standing Order No. 9.
I have already stated why this is a specific matter. I should now like to state why it is a matter of public im-

portance. It is a matter of public importance because during the past year we in this House have endeavoured to create confidence among the citizens of Northern Ireland in the forces of law and order. This work has been carried out by Inspector-General Sir Arthur Young, who has stated publicly his dissatisfaction at the outcome of this inquiry. He has stated that, in his opinion, the information leaves much to be desired.
This is a matter of public importance because we have a democratic Parliament in Northern Ireland, and democratically-elected Members of that Parliament asked questions which are in order in this Chamber. The information which they sought to elicit from the Minister of Home Affairs was denied them on the basis that the Minister of Home Affairs' junior secretary, Mr. Taylor, did not consider it to be in the public interest.
These questions were as follows. Who were the police officers on duty in Derry at the time? Who were the 24 officers who resigned from the force following this incident? Who were the officers injured in the right hand and wearing a bandage at the time of the incident, since one of the persons recognised a policeman by this fact? This is why the matter is of public importance.
This House is the last place where we, the people of Northern Ireland, can seek aid. We have sought aid in every other quarter and this is the supreme Parliament of our people.
This is an urgent matter, because over the past weekend I was holding a series of meetings in County Donegal and I had reason to pass through County Derry on returning here to Parliament. While passing through Derry, I stopped in Bogside. I make no apology to hon. Members who may represent those people when I say that I know the feelings of those people. I realised that there had been trouble last night in Derry. I sought out a senior Army officer and I asked him what had happened. He said it was the second time in 24 hours—in fact, it is the third time that this has happened—that the people of Derry had come on to the streets and attacked the British Army. He and I felt that this was because of the dissatisfaction that they feel about this case. They feel that although they have Sir Arthur Young there, he is implicated in the inquiry over which he had no control.
Here, Mr. Speaker, I crave your indulgence, under Standing Order No. 16, to be allowed incidentally to refer to legislation, although not to deal with it. I refer to the Police Act, which we debated last year. Hon. Members and I asked for a specific Amendment to allow——

Mr. Speaker: Order. I cannot, on an application for the Adjournment of the House under Standing Order No. 9, allow the the hon. Lady to debate an Amendment which she failed to get into the Act last year.

Miss Devlin: With respect, Mr. Speaker, it is not my intention to debate it. I simply wished to refer to it.
This House at the moment would need to invoke Section 75 of the Government of Ireland Act in order to take the necessary steps in sending senior officers from Scotland Yard to reopen the inquiry into this man's death. Although some of us asked for it, it was not granted under the relevant Section of the Police Act. I thank you, Mr. Speaker, for your indulgence in this matter.
I will come to the final point. I ask that this House shall adjourn in order to discuss the urgent matter of reopening the inquiry on the basis of the unsatisfactory nature of the existing inquiry into the death of Mr. Samuel Devenney, with its implications as to the good intentions of Sir Arthur Young, so that this House may restore law and order in Northern Ireland.

Mr. Speaker: The hon. Lady the Member for Mid-Ulster (Miss Devlin) with characteristic courtesy, told me this morning that she might seek this afternoon to make an application under Standing Order No. 9.
The hon. Lady asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that she thinks should have urgent consideration, namely,
 the unsatisfactory nature of the inquiry into the death of Mr. Samuel Devenney and in order that the House should consider what

action it should take in accordance with the powers vested in it by Section 75 of the Government of Ireland Act.
As the House knows, under Standing Order No. 9 I am directed to take into account the several factors set out in the Order but to give no reason for my decision.
I have given very careful consideration to the representations which the hon. Lady has made, but I have to rule that her submissions do not fall within the provisions of Standing Order No. 9 and that, therefore, I cannot submit her application to the House.

BILL PRESENTED

COAL INDUSTRY

Mr. Anthony Wedgwood Benn, supported by Mrs. Secretary Castle, Mr. Secretary Ross, Mr. Secretary Thomas, Mr. Harold Lever, Mrs. Judith Hart, Mr. Dick Taverne, Mr. Eric G. Varley, and Mr. Alan Williams, presented a Bill to make further provision with respect to grants to the National Coal Board and the reimbursement of the Board's losses due to postponed pit closures; with respect to payments to workers in the coal industry who are made redundant and to the reimbursement to electricity generating boards of the cost of using coal in certain cases; to enable the said Board to borrow money otherwise than in sterling and to participate in overseas aid; to amend the National Coal Board (Additional Powers) Act 196; and for connected purposes; And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 131.]

SITTINGS OF THE HOUSE

Resolved,
That this House do meet on Thursday 26th March at Eleven o'clock, that no Questions be taken after Twelve o'clock, and that at Five o'clock Mr. Speaker do adjourn the House without putting any Question.—[Mr. Peart.]

ADJOURNMENT (EASTER)

3.57 p.m.

Dame Irene Ward: On a point of order, Mr. Speaker. May I ask when we are to be able to debate the Motion for the Easter Recess?

Mr. Speaker: If the hon. Lady will turn over the page of her Order Paper she will find that I am just about to put the Question.

Motion made, and Question proposed,

That this House, at its rising on Thursday 26th March, do adjourn till Monday 6th April. —[Mr. Peart.]

Several Hon. Members: Several Hon. Members rose——

Mr. Speaker: Before the debate begins, may I express the hope that hon. Members will be brief. I would remind them that we have a very long agenda on the Order Paper today and that some of us will have to see it all through.

3.58 p.m.

Mr. Michael English: I wish to put to the House various reasons why it should not adjourn, or should come back earlier. There is one point in particular that I wish to raise.
Hon. Members will be aware that for some considerable time there has been concern about the state of the B.B.C. and I.T.A. Many of my colleagues and myself have suggested the setting up of a Royal Commission to discuss this matter, and I understand that some people, including my hon. Friend the Member for Putney (Mr. Hugh Jenkins), have discussed this matter privately with the Prime Minister. I believe that in The Guardian today there is a report that the Prime Minister would be prepared to see a Select Committe of the House set up to discuss the issue.

Mr. Speaker: Order. With respect, I reminded the House that we have some important debates ahead. We cannot discuss, on this Motion, what the hon. Gentleman would like us to debate if we were to give up the Easter holiday. He must ask for time.

Mr. English: I am asking for time to discuss the important subject of what, if anything, is wrong with the B.B.C. and I.T.V. and what, if anything, can

be done to investigate the whole question of broadcasting. It would be unfortunate if a Select Committee were set up to discuss one aspect of broadcasting and not all of it. Indeed, it would be unfortunate if we had such a Select Committee rather than a Royal Commission or a combination of the two.

Mr. Speaker: Order. The hon. Gentleman will be able to go into the detail of the matter if he wins his point and such a debate takes place in Easter week.

Mr. English: We have had only one debate on the communications industry since before the Summer Recess. This important issue is being neglected. There have been reports in the Press that not only has an investigation been suggested, as my hon. Friends and I have recommended from time to time——

Mr. Hugh Jenkins: Before my hon. Friend continues, would he make it clear that he would be prepared to return 24 hours earlier, so shortening the Recess, to discuss this subject?

Mr. English: Apart from Sunday, I would not object to returning 24 hours earlier. However, rather than shorten the Recess, I would prefer the Government to provide time to debate the subject. It is clear that there is a desire for such a debate——

Mr. Speaker: Order. If there is such a desire, the hon. Gentleman will have a chance to debate it on Easter Monday or any day following that during the Recess; that is, if he persuades the House of the rightness of his case.

Mr. English: I will be happy to return on any of those days, Mr. Speaker, to discuss this subject.
The proposed Easter Recess is slightly longer than a long weekend, but not as long as a lengthy Recess. There are many things that hon. Members can do during a long Recess, but with a holiday of this sort it seems that it need hardly exist.
One day should be used for the purpose I have described and, if only in view of the statement made today by my right hon. Friend the Minister for Posts and Telecommunications—there are many other subjects which come within his remit and which have not been debated for some time—the question I have raised


should be before the House without delay; and if time cannot be provided by the Government, it should be provided out of the Easter Recess.

4.4 p.m.

Miss Bernadette Devlin: Having attempted to raise just now, under Standing Order No. 9, a matter of extreme importance to the people of Northern Ireland, I suggest that this House should not adjourn for Easter until the Government have made a statement on the inquiry into the death of Mr. Samuel Devenney.
I will not reiterate the points I made earlier. If the Government require time to consider the matter and cannot make a statement today, I trust that they will make one tomorrow. Failing that, one should be made before we adjourn for Easter. If that is not done, it may unfortunately become necessary for the House to be recalled during the Easter Recess; that is, if the troubles in Northern Ireland are allowed to continue.

4.5 p.m.

Mr. Hector Monro: It would be wrong of the House to rise for Easter without considering the serious bus strike which is going on in Scotland. This strike has been continuing for a fortnight in large areas and for very much longer in selected areas. It is having a serious effect on people going to and from work and pupils going to and from school.
It is an important issue which the House should have time to discuss before we adjourn for Easter and I trust that the Minister of Transport, the Secretary of State for Scotland or another responsible Minister will make a statement on the subject without delay.

4.6 p.m.

Mr. Leslie Huckfield: I have no wish to delay the House on this Motion, because I have a great interest in the subject which we are to debate next. However, I hope that the House will not adjourn for Easter until hon. Members have been given further information about the proposed merger talks between B.U.A. and Caledonian Airways.
Many of my hon. Friends and I listened with astonishment to the recent speech of the President of the Board of Trade in which there was what we regarded as a

serious reversal of Government policy over civil aviation licensing. Having been told that my right hon. Friend proposes to give unlimited time for these proposed merger talks, we fear that the whole issue will be cut and dried by the end of the Easter Recess.
This has been a serious change of Government policy. We may be prevented from discussing the matter further is we adjourn as planned. While I appreciate that many of these negotiations are taking place in private and that it may not be possible for a statement to be issued before next Friday, I would be satisfied if further information on the subject were given to hon. Members, particularly about whether the President of the Board of Trade is prepared to set a time limit on these negotiations.

4.8 p.m.

Mr. R. J. Maxwell-Hyslop: Until the Minister of Agriculture, Fisheries and Food has made a further statement on the Government's agricultural policy, the House should not adjourn for Easter.
Within 24 hours of the Minister announcing the Price Review, of only plus £8·4 million, a fresh development took place in that the National Economic Development Council issued a report stating that the Government's selective expansion programme, to which the Government are publicly committed, has not got off the ground because of the shortage——

Mr. Speaker: Order. The hon. Gentleman's remarks would have been in order had he asked a question of the Minister when he made his statement. They will, of course, be in order if he can persuade the House to return on Good Friday or on any of the days planned for the Easter Recess. At this stage, however, he may only ask for time to debate these issues.

Mr. Maxwell-Hyslop: The House could return earlier because the Government have not made an announcement about any time being provided for the Price Review to be debated. This matter is becoming increasingly pressing, not only because of the reaction to the Price Review of the agricultural community but because the Government's entire agricultural policy lies in ruins, as has


been stated by its own body, the N.E.D.C.
There are two particular reasons why the N.E.D.C.'s report, published within 24 hours of the Minister's statement, should be considered. The first is that it highlights the lack of confidence by the agricultural community in the future of the industry; and the second——

Mr. Speaker: Order. Highlights will have to be mentioned if, or when, the debate for which the hon. Gentleman is asking takes place.

Mr. Maxwell-Hyslop: There is the obvious necessity to hold a debate earlier than would otherwise have occurred and the only time that one can see for this purpose is by the House coming back from the Recess earlier than is proposed by the Government. It is clear that the selective expansion programme has failed because of lack of confidence in the future and lack of cash.
The situation can only be restored by further Government action and, as the Minister of Agriculture has given no indication of having such action in mind, it is necessary for the House to have the opportunity to debate the situation.

4.10 p.m.

The Minister without Portfolio and Deputy Leader of the House of Commons (Mr. Peter Shore): By leave of the House, I will reply briefly to points raised by hon. Members, but before doing so perhaps I may explain to the House that the proposed Recess is not as long as the Easter Recess was at one time. We suggest that the House should not sit on 10 days. There have been 23 Easter Recesses since the end of the war and only three of these lasted for 10 days, the other 20 lasting for 11 days. Thus, we are not seeking as long a Recess as has been customary in the past. On the contrary, it is rather shorter. The Government have a very full programme ahead and are as anxious as hon. Members to make progress with it.
My hon. Friend the Member for Nottingham, West (Mr. English) raised the question of the B.B.C., the I.T.A. and related matters. I accept the widespread interest in these affairs, but I think that there is no reason for my hon. Friend

to feel that they constitute so urgent a matter that we should curtail the Recess so that it can be properly discussed. Indeed, I understand that one of the Adjournment Motions which you, Mr. Speaker, have selected for Thursday may touch on broadcasting.
I have great sympathy, as I am sure the whole House has, with the case put by my hon. Friend the Member for Mid. Ulster (Miss Devlin), but I am advised that there is no Ministerial responsibility here for that case and the problem she has put. I will, of course, consider the matter further. I am making a fairly immediate response to what she has said.
My hon. Friend also suggested that this affair might trigger off other, larger and even less welcome events in Northern Ireland. I sincerely hope that her view turns out to be pessimistic. I remind her that, should things take the course which we frankly do not expect, there are established procedures for an early recall of the House.

Mr. Michael Foot: Will my right hon. Friend undertake to ask the Home Secretary whether he will not make a statement tomorrow on the situation generally in Ulster as well as referring to the case raised by my hon. Friend the Member for Mid-Ulster (Miss Devlin), to emphasise once again that the final responsibility does rest with this House?

Mr. Shore: I certainly undertake to draw the attention of my right hon. Friend the Home Secretary to the points which have been raised.

Mr. Roy Roebuck: While conceding that there may not be Ministerial responsibility here in this case, may I ask whether my right hon. Friend does not agree, as Deputy Leader of the House, that there is a parliamentary responsibility for the welfare of citizens in Northern Ireland?

Mr. Shore: We certainly accept that we have here an ultimate and general responsibility for the affairs of the whole of the United Kingdom, but I have to consider how particular cases relate to that general responsibility. I would obviously seek to have more refined and careful information of this case before giving a judgment on the points raised.

Miss Devlin: Does my right hon. Friend accept that, although, since I came to the House, my viewpoint has been pessimistic, it has never been proved wrong? With regard to the recall of the House, I remind him that in earlier circumstances, we still managed to get the British Army into Northern Ireland without the recall of the House. Will he reconsider the position?

Mr. Shore: My hon. Friend has indeed often been right, but I think she will agree that occasionally she may also, like others, be wrong. However, I promise her that I shall consider the points which have been put.

Mr. John Mendelson: Anyone who has been in Northern Ireland, either as part of a delegation or as an individual, and who has talked to the Commander-in-Chief and knows about the Security Committee meetings in which he plays a prominent part, would agree that there is now a new situation since the Commander-in-Chief has taken command of the police. Surely the House has a duty to consider the request made by my hon. Friend the Member for Mid-Ulster (Miss Devlin). The Home Secretary should, therefore, be asked urgently to make a statement before the Recess.

Mr. Shore: I have already assured the House that I will draw my right hon. Friend's attention to the points made. Clearly, I cannot go beyond that at present.
The hon. Member for Dumfries (Mr. Monro) was concerned about the bus strike in Scotland. As he knows, talks have been taking place between the representatives of the Scottish bus group involved and representatives of the Transport and General Workers' Union on issues appropriate for negotiation. They are to continue at a meeting tomorrow. As such talks are in progress between the parties concerned, it is clearly important that nothing should be done or said to prejudice their success. I hope for a fruitful outcome to those talks.
My hon. Friend the Member for Nuneaton (Mr. Leslie Huckfield) referred to the speech of my hon. Friend the President of the Board of Trade last week on the proposed B.U.A. merger, but clearly, as it is so short a time since a major debate in the House, there is little that I

could add now. I am certain that the points my hon. Friend has made and his feelings about the desirability of reaching an early conclusion to these talks will be understood by my right hon. Friend, who will keep these points very much in mind.

Mr. Leslie Huckfield: Will my right hon. Friend bear in mind that I would rather that these talks were not brought to a conclusion, because I would not like to see them succeed? Will he also make representations to my right hon. Friend the President of the Board of Trade that it would be much appreciated if we could have a statement before the Recess because many hon. Members feel that far too much of this matter has gone on behind the back of the House in the past?

Mr. Shore: My hon. Friend is now making a slightly different point. When he first referred to the matter, it was to make the critical point that this was an open-ended discussion, or so he feared, between the two air companies concerned and he suggested that he was anxious to see it speeded up. I will obviously have to consider both the points he has raised and see how they can best be met.
The hon. Member for Tiverton (Mr. Maxwell-Hyslop) asked whether there could be a further statement on agricultural policy in the light of the recent N.E.D.C. report on the selective expansion programme. I will draw this to the attention of my right hon Friend the Minister of Agriculture. We can look forward later to opportunities for further discussion of the agricultural Price Review, so I should have thought that this was not a reason why we should object to the Motion for the Easter Adjournment.
I have tried to reply to all the points raised by hon. Members; there were quite a number of them which came in rather staccato bursts, like machine-gun fire. It remains for me only to wish hon. Members a well-deserved and enjoyable Easter break, and to commend the Motion to the House.

Mr. English: Before my right hon. Friend sits down, will he answer the general point about the short length of the Recess? Would not it be better not to have a Recess except for the holiday


days and put the week somewhere else? This Recess is of a most unusual length which is of no particular use.

Mr. Shore: My hon. Friend is under a misapprehension. Under this Government, there have been five or six Easter Recesses, at least two of which have been for precisely 10 days, which is the period we are now recommending.

Question put and agreed to.

Resolved,
That this House, at its rising on Thursday 26th March, do adjourn till Monday 6th April.

Orders of the Day — CONSOLIDATED FUND (No. 2) BILL

Considered in Committee; reported without Amendment; read the Third time and passed.

Orders of the Day — NATIONAL HEALTH SERVICE (FUTURE STRUCTURE)

4.23 p.m.

The Secretary of State for Social Services (Mr. Richard Crossman): I beg to move,
That this House takes note of the Green Paper on the Future Structure of the National Health Service.
May I start with one general observation about the reform of local government and of the health services. For years everybody has been saying that the structure of local government is completely out of date, and that we must overhaul it if we are to avoid a breakdown. So when, as Minister of Housing, I proposed a Royal Commission for this purpose, there was no resentment either inside local government or among the general public.
But in the Health Service I found a very different attitude. There are many detailed criticisms, but most people accept the service and are very proud of it, and I find that there is no public demand for sweeping structural reform. Indeed, the critics consist almost entirely of those working inside the service—people who really know how it works and who, because they are dedicated to it, feel maddened when administrative barriers make it difficult for them to provide the quality of service which they know it is possible to provide.
This contrast between the attitudes to local government and attitudes to the Health Service is not surprising. The essential structure of local government is now nearly 90 years old, while the Health Service was created only 22 years ago. Anyone over 50 can remember the pre-war health services, with all their gaps and deficiencies, especially for women and children, the anomalies of national health insurance, their dependence on means tests and charity and, above all


else, the vast areas in the country with little first-class specialist care.
The Health Service has 22 years of real achievement behind it. We have in Britain the best general practitioner service in the world. We have developed our community health services to an extent which few countries can equal. Highly specialised treatment is now available to everyone, wherever they live, at whatever the cost. For people who are seriously ill, the very best treatment is available without regard to class or income.
It is only quite recently the people have become less tolerant, or, it may be, more articulate, about the failings of the Health Service—the weeks spent waiting for outpatient appointments; the months spent waiting for the summons to hospital for non-urgent surgery, and the shameful overcrowding and understaffing of far too many of our long stay hospitals, particularly for the mentally handicapped.
These failings are beginning to be admitted, and yet I often hear it said that they can be put right simply by spending more money on the Health Service. Of course, money is important. Indeed, we devoted an afternoon to the discussion of this problem last July, and there was general agreement from both sides of the House that, though more money was necessary, it was difficult to decide how to raise it. But, even if the Chancellor of the Exchequer gave me all the money I asked for, I know that it is not good enough simply to pour extra money into the Health Service with its present organisation unchanged, and the major reason for this is that our services have become hospital dominated to an extent which is not in the interest either of the patient or of the taxpayer.
This is true whether we look at acute hospitals, chronic hospitals, or mental hospitals. In all of them we find many people admitted who need not be admitted. We find some outpatients admitted for diagnostic tests which could have been clone better from home. We find far too many staying too long once they are admitted, and, with hospital costs soaring, every patient who stays in hospital a day too long wastes a lot of money and a lot of scarce skill.
Of course, I am not blaming anyone for this, least of all the doctors. What I am blaming is the unbalanced structure

of the Health Service. If the service were organised so that general practitioners had better contact with diagnostic services of the hospital, on the one side, and the health services and social services of the local authorities, on the other, if hospitals could be sure of a place in a half-way house for each patient who needed it and a nurse and home help to look after each patient who has left hospital; if we had far more community services to keep people out of hospital, how many days of costly hospitalisation could be saved.
What we need is a network of small local dynamos of out-of-hospital care, health centres, group practices, and so on, to counterbalance the centralised powerhouse of the new large district hospital and ensure that the latter does the highly specialised work which only it can do.
That is why, as we have stated in the Green Paper, we cannot be content simply to pour more money into the existing tripartite service. Instead, we must create an integrated service, because most of the faults and failings of the service derive from its tripartite structure. For example, the health visitor and the domiliary nurse and the midwife, who should all be working with the general practioner as part of a team, are at present organised by local authorities, and often work completely separately from the general practitioners who are contracted to executive councils. In the same way there is a wasteful separation between the hospital doctors and the community services outside.
Expedient, after expedient has been tried to bring the three parts of the service together. For example, about a quarter of the general practitioners have jobs in hospitals and about a quarter of local authority nursing staff are attached to particular general practices in liaison or attachment schemes. These are great advantages. It is incredible how well the service is being made to work, despite these divisions, but they cost a lot of wasted effort and wasted money.
I am often asked why Aneurin Bevan ever allowed this tripartite structure to be established. The answer, of course, is that he had to get the service going against powerful vested interests and, to do so, he came to terms with a large slice of the status quo. When he took


the hospitals away he placated the local authorities by leaving the medical officer of health in charge of his home care and preventive health services, and he placated the general practitioners by giving them security under new executive councils, which were really only the old insurance committees under another name.
Indeed, the only really radical change of structure in 1948 was the transfer of virtually all the hospitals in the country from local government and from the voluntary bodies who had run them before into the control of the new regional hospital boards nominated by central government, and the hospital management-committees nominated by the regional hospital boards. It was clear at the time that one could not possibly develop a true National Health Service if one left the hospitals in the hands of this medley of local government and voluntary authorities.
Since, in this Green Paper, we propose to wind up the regional hospital boards and the hospital management committees, I would like to make it clear straight away what an essential rôle they have fulfilled in this first phase of the Health Service, and to pay my tribute to the work which thousands of devoted people have put in as members of them. It would have been impossible to develop the national hospital service, which is an essential and central feature of a truly National Health Service, without them.
As the House knows, the central proposal of the Green Paper is to replace the tripartite structure of the hospital service, the executive councils and the local authority health services by a fully integrated Health Service operating through about 90 area health authorities, which, in general, will correspond to the Maud unitary authorities and metropolitan districts.
But before I discuss the functions of these new health authorities, I had better deal with the basic objection to our whole proposal for reform, which I shall certainly be hearing some time today. It may have been reasonable, I shall be told, to remove the hospitals from the control of the county boroughs and county councils in 1948, because units of this size were quite unsuitable for hospital planning, but now that my right hon.

Friend is proposing to scrap these outdated units and create brand new authorities specially enlarged and big enough to cope with the modern problems of planning and administration, why, I shall be asked, am I keeping health outside this new reformed structure of local government?
I can assure the House that I did not dismiss the case for local government control without intensive discussion of the possibilities with all those concerned and I came to appreciate that there were compelling reasons against it. I would like to mention four reasons which, in total, convinced me that it was "not on".
First is the harsh fact that local authorities simply do not possess the independent financial resources which would enable them to take over responsibility for the whole Health Service. The figures are remarkable. At present, the central Government spend about £1,400 million on the Health Service. All the services at present administered by local government cost about £3,000 million a year, of which, in 1970–71, the central Government will be financing 57 per cent. through the rate support grant. If the Health Service were transferred to local government, the expenditure of local authorities would have to increase by nearly 50 per cent.
How could local authorities obtain this money? If it all came from the rates, they would, roughly, have to be doubled. If the £1,400 million simply attracted rate support grant at the present level of 57 per cent., about £600 million would have to be added to the rate burden. This would mean an average increase in rates of about 5s. 6d. in the £. Unless a very large new source of revenue for local authorities could be found, central Government would inevitably meet the whole cost, at least initially.
I cannot see any prospect of a really new major source of revenue for local authorities, although, for confirmation of this, we must await the Green Paper on local government finance. Nor do I think that it would be in the best interests of local government to become too heavily dependent on the central Government. I suspect that there are many local government people who share my view. Nor should this question of the finances of the Health Service be considered a temporary problem. The Health Service will


need a lot more money each year for as far ahead as can be foreseen.
Second, there are some vital parts of the Health Service, particularly of the hospital service, which require planning and organisation on a scale much larger than that of the unitary authorities and metropolitan districts. There is a whole number of specialties—neurology, radiotherapy, cardiac surgery, are three examples—in which only one unit may be required for an area which covers four or five Maud unitary authorities. In much the same way, it is very difficult to see how consultants and specialists could be rationally and economically distributed over the country if they were appointed independently by about 90 local authorities.
There is also a number of services—blood transfusion and ambulances are examples—which will probably need to be organised on a regional basis, and, finally, there is the immensely important issue of the universities and medical schools, which it is difficult to see fitting happily into a Health Service run by local government. My hon. Friend will have a good deal more to say on this in the winding-up speech.
What I am saying is that, if the new local authorities were given the health services to run, no responsible Government could permit them to run those services with the degree of independence which they take for granted in running their other services. In fact, a Health Service, even if it can and should be administered locally, must be planned nationally.
That brings me to the third objection—the need for national availability in the Health Service. At present, patients and doctors do not have their freedom of choice restricted by administrative frontiers, as is the case in education, for instance. There is nothing to stop a patient going to a hospital or to a general practitioner far away from his home. This is a valuable freedom which we enjoy under our present Health Service, but I cannot see it lasting for long under local government control.
Fourth, and most important, there is the issue of clinical freedom, upon which the medical profession have strong feelings. They would hate to see clinical priorities become issues debated in the town hall, or on the hustings in local

elections. I sometimes suspect that some of these fears are deliberately exaggerated for political purposes, but from all I have heard during many many hours of formal and informal consultations, I have become convinced that there are sound grounds for the profession's opposition to the transfer. I am even more certain that any Government who decided to ride roughshod over their carefully considered view and impose this solution would do the Health Service irreparable harm.
This, therefore, is the first firm decision which the Government have taken—that the Health Service will continue to remain outside local government—but this does not mean that we have failed to recognise the immense importance of the closest co-ordination between the reconstructed health services run by the new area health authorities and the reconstructed social services run by the new unitary Maud authorities. Hence the second decision, that, in general, the areas for the Health Service must be the same as those for local government.
Let me give one simple illustration which will bring out the importance of this single decision. During recent months I have been seriously concerned by the appalling problems of overcrowding at South Ockenden, where a huge mentally handicapped hospital in the middle of Essex serves a catchment area of 1½ million people in no fewer than 10 London local authorities. The proper solution to this problem would be for those local authorities to provide hostels and half-way houses for a large number of South Ockenden patients, but this is almost impossible to organise with the multiplicity of conflicting authorities. We try to alleviate the trouble, but South Ockenden remains dangerously overcrowded.
This kind of problem will become vastly easier to tackle when each local authority is matched by an equal and opposite health authority. Indeed, this is the only way in which to plan community services matching with hospital services and to achieve a proper balance between the money spent on each.
I have been asked, since the Green Paper was published, whether this Government decision about boundaries is an absolute one, and whether there are not cases where more than one Maud area


or metropolitan district could be combined to make one health authority. We shall look at this carefully before we come to a final conclusion in the White Paper, but I will say straightaway that it will be silly to create a health area without at least one good-sized district hospital. This could happen in the case of one or two Maud districts.
It may well he necessary to combine some small unitary authorities with a larger neighbour for health purposes, just as it may well be necessary to combine metropolitan districts to ensure that the health area has a proper balance of hospitals. But even if this is necessary, there is one rule which we are determined to enforce dogmatically, and that is the principle that no health boundary must cut through a local authority boundary and that every health authority's boundaries must be co-terminous with local authority boundaries.
The third firm decision is on the boundary between the health services and the services controlled by local government. As I explained on Second Reading of the Local Authority Social Services Bill, the criterion is that the health authorities will control those services where the skills required are predominantly those of the health professions, while local authorities will control personal services where the primary skill required is social care and support. This set of services is listed in paragraph 39 of the Green Paper.
I was very struck during that Second Reading debate by the fact that this particular division—once one assumes that one has to have a division—has broadly been accepted as sensible. If one divides the two at all that that is roughly the way it should he done. Apart from these three decisions the rest of the Green Paper is a consultative document.
I turn from the Government's firm decisions to the new structural proposals which we have developed as the result of the enormous amount of criticism provoked by the first Green Paper, and I start with the functions of the area health authorities. I hope that the House will agree that all responsibilities for an integrated Health Service which can be economically and efficiently devolved on the area health authorities should be conferred on them.
My aim at least is the maximum decentralisation of the Health Service consistent with maintaining national priorities. Each health authority will appoint its own staff and work out its own budget. And each will work in the closest co-operation with its twinned local authority.
In proposing these new area authorities, we are trying to achieve an integrated management of the Health Service and to ensure co-ordination with local authority services. But there is a third and equally important aim which I have always had in mind. Among the criticisms we received of the first Green Paper there is no doubt which was the most strongly argued and strongly felt—the complaint that in its present form the Health Service, especially the hospital services, is far too remote from consumer and patient and achieves far too little local participation. I believe that there is a great deal in this criticism and in working out these new proposals we have been specially concerned to meet it.
Our first method of encouraging local participation has been to scrap the system of 100 per cent. appointment—that is, the monopoly of appointments—by Ministers which prevailed in the hospital service and to give our new area health authorities a new, and I think, in English politics, unprecedented composition. I suppose that one could find some precedent for it in the make up of the executive councils, which have something similar. We propose a board consisting of one-third nominated by the local authority, not people from the authority whom I select, but selected by it, one-third nominated by the Health Service professions, not only the doctors, notice, but the other professions, too, leaving the Minister to appoint only one-third in addition to the chairman.
I am convinced that local authority participation on this scale is infinitely preferable for the reasons I have stated, to any local authority take-over and I am convinced that this, combined with generous professional representation will bring the Health Service into contact with public opinion far more fruitfully than before.
But to strengthen local participation still further I have introduced another new feature into this Green Paper Mark II with the proposal that the first job of


each area authority will be to divide the area into districts, each normally centred round its district hospital and each managed by a district committee composed half of members of the area board and half of local representatives drawn from people living and working in the area but who are not already on the area authority, unions, voluntary organisations and so on.
Since the Green Paper was published, this proposal for devolution has received surprisingly rough treatment, chiefly, I think, because we have not proposed a second statutory tier like the urban district council underneath the county council, but a district committee whch is really a sub-committee of the main authority. I have been told that without statutory devolution and a budget of its own any district committee would be impotent and that no self-respecting person would be willing to work on it.
Since I have seen a good deal of second-tier local government I find that completely uncritical adulation of it hard to understand. Are U.D.Cs. and R.D.Cs. the last thing in independent creative administration? Do they draw on all the finest talents in the community? On the contrary, as the Maud Commission discovered, two-tier devolution is a cumbrous and frustrating method of local government.
If one wants to decentralise effectively, then I am sure that the way to do it is to lay it down in the constitution of the health authority that it must district the area as its first duty and it must devolve effective administrative authority on its district sub-committees. The second sentence is not in the Green Paper.

Lord Balniel: Exactly.

Mr. Crossman: We are moving forward, with interest. I am glad to see the argument being so closely followed. I repeat what I said. It must devolve effective administrative authority on its district sub-committees.
Nevertheless, on this issue I am very much keeping an open mind since my main interest is to ensure that come what may these district committees form the democratic foundation for our new and participatory Health Service. It is here in the districts that public opinion can be

really effective in influencing an integrated Service. It is here that controversial issues can and should be argued out. It is here that voluntary organisations can bring their influence to bear upon the hospitals and the community services.
The House may have noticed that about the composition of these district committees the Green Paper is vague. I am pretty sure that half of them should be members of the area boards since they are sub-committees of the area boards, but how should the other half of local members be selected? By co-option? By election? Or by both? On this point, again, our Green Paper is a consultative document and we shall be willing to listen a great deal before making up our minds; and I shall certainly be listening to the opinions expressed in the House today.
I now turn to the second and far more difficult question which we have to answer, and I am now moving from below the area to above the area. What precisely are the functions which cannot be satisfactorily performed by the area health authority and its district committees and should those functions be performed by a separate regional council, another tier, or alternatively by the central department acting with regional advice.
I have already mentioned two of the possible regional functions, the planning of consultancy appointments and the development of specialist services, to which I would now add the third and equally important responsibility for postgraduate education and research. But there is rather more doubt in our minds about the building programme. At present, we have 14 regional hospital boards each trying to staff up fully-fledged building departments. But more and more we find, for instance with our best buy hospitals, the strength of the case for centralised planning of the most complex hospital building.
This problem is being argued out in detail and needs a lot more study before final conclusions are reached. But on this controversial issue of regionalism I will add just one other thing. I notice that one or two of our critics—I am thinking particularly of a well-argued leader in The Times—have detected in the Green Paper a plan for a take-over by the central Department, whose nefarious purpose it is to substitute 90 small health


authorities for 14 powerful regional hospital boards and so to exert a vastly increased central control of the whole service. All I can tell these critics is that under our present set-up the Secretary of State has almost unlimited powers. Under the present constitution he is as powerful—or as impotent—as a Persian king and the regional hospital boards have no more independence than a Persian satrap. No more, no less. They are his agents just as the hospital management committees are, in turn, the agents of the R.H.B.s.
The Health Service works like most other British institutions because, although those in authority have huge theoretical powers, they hold them in reserve and rarely if ever exert them. We have no proposal in this Green Paper for changing this relationship between the Secretary of State and the Health Service. Theoretically, the new area health boards will be his agents in exactly the same sense as the R.H.B.s are his agents today. Theoretically, he will in the future be able to issue edicts as he theoretically is able to today. And all I can add is that the whole intention of the Green Paper is not to increase centralisation, but to create compact area authorities which, unlike the regional hospital boards, will have an effective district organisation and a really democratic basis for the criticisms they make of the central Government.
As we pointed out in the Green Paper, since we pay 100 per cent. of the money we shall have to exert severe and accurate financial control, and we must improve on our present inadequate methods of financial control to that end. But I do not believe that the much more democratic authorities which we are creating will be more under the thumb of the Minister than the present boards are now. They are, of course, all appointed by him. I just do not believe it. We have moved here towards more democracy and more participation.
If asked to sum up the improvements which the Green Paper is designed to achieve, I should list them in this way.
First, under the new integrated health authorities, we should be able at last to see rapid expansion of health centres and group practices linked with domiciliary health services grid social services on a

scale which will make preventive medicine the dominant theme which it should always have been. Then, we can have a health service instead of an illness service. But without reorganisation of the kind outlined in the Green Paper, that is all a pipe dream, however much money we spend.
Second, the Green Paper provides sub-stantial aid to the solution of what is now the insoluble problem of the long-stay hospital. A proper balance between community service and hospital service—it being possible for someone actually to pay money for running both services in balance, with the community services being developed in real association with the long-stay hospitals—may well enable us to halve the number of patients in one generation in our long-stay hospitals. Without that, we cannot do so, and the problem will remain insoluble.

Mr. Marcus Worsley: Most of these services will be provided by the social service department of the local authority, will they not, so that the right hon. Gentleman's new set-up does not provide the choice which he suggests?

Mr. Crossman: There are, I think, two answers to that. I take it that the hon. Gentleman is thinking principally of mental health. He will see in the Green Paper that all the hostels and half-way houses which require any kind of medical supervision remain the responsibility of the Health Service; they will be health centres outside hospitals. I think that we shall find that the whole initiative will come there.
Second, I do not think that local authorities will long to spend rates on something for which provision can be made out of taxation. In addition, I think that the set-up we have proposed, when taken in conjunction with the Seebohm reorganisation, the creation of personal services with a single director, will give the possibility of real co-ordination between local authority services and health services. With a simple one-to-one relationship of the two services, one can begin to do that. For instance, there can be cross-representation—indeed, one will have to have it—on the single committee which runs all the personal services.
I would assume that health committees will automatically have to be represented,


just as on the Health Service committee there must be automatic representation of the councillors on the personal services committee. With the structure being integrated, they can really work together, and I think, therefore, that the frontier we propose can be made to work. However, I agree that it will take good will to make any frontier work, including the one which we have laid down for ourselves here.
The third reason why I believe that the improvements set out in the Green Paper will help is that the integrated service which we plan should at least help us to cope with another eternal problem, the problem of the soaring costs of acute medicine, by bringing general practitioners, hospital doctors and the domiciliary services together under a single management.
Fourth, from the consumers' point of view, we hope that the Green Paper plans will at long last inject an invigorating dose of democratic participation into the service, which, for all its virtues, is still felt to be insufficiently sensitive to the views of the community which it serves.
Fifth—and, perhaps, most important—from the patients' point of view, the integrated structure which we propose should mean that at last full knowledge of his problems is shared by all those looking after him, and the services which he needs are made available to him in time.
That, at least, is the spirit in which this Green Paper Mark II has been drafted and in which we shall have the consultations for which it forms the agenda before preparing our White Paper this summer. Of those consultations, this debate forms a most important part.

4.55 p.m.

Lord Balniel: The whole House will wish to thank the Secretary of State for his thoughtful and lucid exposition of the arguments lying behind the Green Paper. I liked his description of himself as a Persian king surrounded by his satraps. That thought has a certain relevance here, since so much of the Green Paper is so unutterably vague that it is almost Byzantine in its obscurity. Indeed, one of the right hon. Gentlemen's noble Friends said that there was more wool in this Green Paper than there is on a sheep's back.
The Green Paper invites, as the Secretary of State did at the end of his speech, comments and suggestions from organisations and individuals, and it is suggested that these comments from organisations should be sent to Alexander Fleming House. The other day, the Secretary of State specifically refused a request to publish the comments of these organisations. Perhaps they are all being recorded for the benefit of his autobiography. But it would be of value to the House if the comments were published of organisations such as those representing the regional hospital boards, the Teaching Hospitals' Association, the hospital management committees, the professional organisations, the voluntary organisations and the local authorities. It would be of value to our debate if that were done.

Mr. Crossman: When that request is made, we pointed out that, as is normal in these cases, there is a vast amount of material, and we said that any organisation is perfectly entitled to publish its own evidence. But I think that it would be wrong to burden the Stationery Office with publishing every word of all the written evidence which we receive.

Lord Balniel: None the less, it would be of value to have the main representations which have been submitted to the Minister. The more particularly would it be of value since Government policy on this subject has veered wildly. In July, 1968, they suggested 50 singletier authorities. In February, 1969, there was to be a two-tier system with 200 district committees, based on district general hospitals, and above that there were to be 20 regional authorities. Now, it is to be 90 area health authorities matching the Redcliffe-Maud unitary councils, with below them an undisclosed number—probably about 200—of district committees, and above them 14 regional health councils with such undefined and limited powers that the overall effect will be a greater centralisation than exists now.
All this shows a certain indecision on the part of the Government, though I add, in fairness, that it shows also how incredibly difficult it is to reconstruct the service. I make clear at the outset that, while there are parts of the Green Paper which we accept, we do not accept the firm decision stated in the Green Paper that the area health authorities are to be


tied to the Redcliffe-Maud unitary councils, for the simple reason that we do not accept the Redcliffe-Maud unitary councils as being the concept on which local government should be based.
In facing what is undoubtedly a difficult decision and one in which one can never please all the interested parties, I shall try to step back and look at the principles which should guide us in the reconstruction. The purpose of the Health Service is not to please administrators. It is not to strengthen local government. It is not to please doctors. The views of all of them should be given immense weight.
Certainly, it is important to strengthen local democracy. Certainly the views of the doctors, the nurses and the other professional people who dedicate their lives to the service should be given great weight. Certainly the administrative officers who have run the Service for the past 20 years have an experience which few can match. But the basic purpose of the Health Service is to ensure the best all-round provision for the patients, whether they be at home, in community care or in hospitals. Prompt, sympathetic and efficient treatment of the patient is the criterion by which the service should be judged. The health of an individual cannot be compartmentalised.
I agree with the Porritt Report, published in 1962, sponsored by the B.M.A. and embodied in the Green Paper—it is sad that there is in the Green Paper no reference to its work—that the three branches of the Health Service—the hospital service, the local authority health service and the general practitioners' service—should be brought together. There is such general agreement on this matter that it is not worth while developing the argument. The Green Paper, in Chapter 2, sets out the argument at considerable length and I cannot add to it.

Dr. M. P. Winstanley: The hon. Gentleman will recall, having said that he agrees with the recommendation of the Porritt Report, that it left out the executive council services and did not bring them into the unified structure, whereas the Green Paper does.

Lord Balniel: I accept the specific point made by the hon. Gentleman. But the general concept of unification recommended by the Porritt Report is embodied in the Green Paper.
I will not expand the case for unification with high-falutin' arguments. I thought that it was well put by Lord Soper when he said that Sarah Bernhardt, when confronted by the Ten Commandments, said that she agreed with them in general, but thought that there were too many of them. There are too many parts in the Health Service. Having decided on unification, we must decide on the principles of the administrative structure that we will establish.
The running of the Health Service is big business—£1,700 million a year. Social costs, political judgment, local participation and public accountability are involved. But equally administrative efficiency, financial efficiency, cost-effectiveness and managerial techniques are as important in this service as in any other business.
I accept that an absolutely straightforward comparison between an industrial organisation and a health service organisation is over-simple, if only for the reason that the demands on the Health Service are unlimited. There is no market resistance. The success is cure and life compared with the business success of financial reward. But the patients and the staff will get the best service from the money available only if the services are more efficient: if the money is spent more effectively, and only if they are more responsive to local wishes. It is here that I part company from the Government's proposals.
No administrator of any standing would dream of an administrative structure such as is being proposed. It is though certainly an improvement on the proposals put forward in the last Green Paper. The Minister proposes 90 area health boards directly answerable to him. I believe that he will become involved in detailed control which will not only be inefficient, but positively harmful to the interests of the medical profession.
The true rôle of the Ministry should be general policy-making and the giving of positive leadership. The Minister should proclaim national policy and lay down guidelines and standards. He should


have an inspectorate to enforce these standards. He should be able to allocate resources between different regions, not between 90 different local area health authorities. He should exercise general overall financial control to tilt the financial resources towards the deprived areas of the Midlands and the North.
In this administrative structure there should be a massive devolution of executive responsibility from the Minister to the regions and from the regions to the area health boards. Instead, there is every indication that the Minister is gathering the strands of executive decision into his own hands. It is not devolution of power that he is seeking; it is greater central control which will result from the proposals in the Green Paper.
Beneath the Ministry it is proposed to set up regional health councils. I would give those councils the overall responsibility for health planning for their regions. The task of these authorities should be to assess regional needs and to allocate—I emphasise the word "allocate"—money to the area health boards. It is they who should have the overall responsibility for regional planning; it is they who should plan the specialties to which the Minister referred—neurology, radio-therapy, cardiac surgery and renal treatment—and it is they who should ensure facilities for the organisation of post-graduate medical training. This is too big a task for the area health boards. The regional health councils should undertake the general determination of priorities in their regions.

Mr. Denis Coe: That is what my right hon. Friend said.

Lord Balniel: It is not. Instead, the Green Paper says that
their functions have not been defined precisely".
It would be more correct to say that their functions have not been defined at all. Their functions are almost entirely advisory.
The Green Paper, in paragraph 85, states:
Similarly, their functions have not been defined precisely. But one of the most important functions will be planning the hospital and specialist services in the region and assessing priorities between competing developments. Of special importance will be

the planning of the development and location of the rarer specialties. In this work their rôle will be advisory, both to the central Department and to the area health authorities. But in view of their membership, their recommendations will carry great weight.
Their rôle will be advisory. There is not one word about the allocation of resources or about executive responsibility. I think that these regional health councils, because they have no financial resources, will be without authority and ineffective. Indeed, I cannot think who will serve on them, or any staff who will stay with them, because their powers are completely nebulous. It means that the Minister will have to try to allocate the resources fairly between the 90 authorities and generally supervise their work. This will mean more centralisation, not less. It will mean a significant shift of planning, of budgeting, of control, and of administrative decision from the regions to the centre.
The Government are unusually frank about this, because paragraph 60 of the White Paper states:
It is the Secretary of State who will allocate the available funds to the new area health authorities both on capital and revenue account; and he must be satisfied that the money is spent to the best advantage. The central Department will need to concern itself more closely than in the past with the expenditure and efficiency of the administration at the local level.
The comment of the British Medical Journal, in its leader of 14th February this year, is as follows:
In fact, the whole picture is one of in creased central control with strengthened regional offices of the Health Department—smaller Elephants in the periphery. To assist him 'in exercising these enlarged functions' the Secretary of State will consult a new central advisory council on all matters of importance to the Health Service, 'including the deployment of available resources.' Its membership is to be widely drawn from within and outside the professions. In an administration structure in which the power of the centre is to be markedly increased, the composition and functions of this central advisory council will be a matter of great importance, as, indeed, will be the arrangements for professional advisory committees throughout the service.
I like the analogy of elephants at the periphery. They are rather like those elephants that travellers used to bring back from Asia and put on their mantelpieces, a whole string of elephants getting steadily smaller and smaller. But I do not like them all being towed along by the Minister. There should be much


greater local independence—not more sub-offices of the Elephant and Castle headquarters of the Ministry.
The Times, in the article quoted by the right hon. Gentleman, commented categorically about increased centralisation. It ends its profoundly interesting article with these words:
As it stands, the Green Paper presents a threat of central control which could hamper the development of British medicine and is not acceptable as the pattern of health administration for years to come.
This lack of defined responsibility is to be found not only at the regional level, but also at district committee level.
This same lack of defined responsibility applies also to the teaching hospitals. My right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) is present in the House and if he catches your eye, Mr. Speaker, no doubt will say something about teaching hospitals since he has far greater experience of them than almost any of us here. If the responsibilities of the district committees are not defined, they will be the mere tools of the area health boards. This would be a pity. I believe that it is at district level that the initiative of voluntary spirit and the impetus of local participation should arise.
It is clear from what I have said that I am not impressed by the over-centralised administrative structure which is being established. However, I give a much warmer welcome to other proposals in the Green Paper. The Minister surely is right to make the boundaries of the area health boards coterminous with local government boundaries. We do not believe in the Maud unitary councils. But I am talking about the principles which should guide us and the principle which activates the Minister in this respect has my support. It is a correct principle and is essential if we are to avoid too great a cleavage between the welfare services of local authorities, on the one hand, and the area health boards and district committees, on the other.
In many countries, sadly, the family doctor is a disappearing figure. I believe that he or she should be the key figure of the team fighting ill health both in the community and in the hospital. The preventive health services, immunisation, health education, food safety and hygiene

must remain in local government. The new social services committee, family case work, social work, with the disabled and mentally handicapped, day centres and adult training centres—all these remain with local government. In these services and a multitude of others, and, in particular, the care of the elderly, the rôle of the general practitioner is crucial. So, also, is his rôle in the newly developing district hospitals.
It has been wrong in past years to see the family doctor playing an ever-smaller part in the hospitals. This trend must be reversed. Indeed, we would also reverse the trend of closing down cottage hospitals. They command intense local support. They offer scope for simple medical care. They are integrated in the local community. Even if their original medical work has to be changed they can be adapted, for instance to maternity care or the care of elderly people. Only where the arguments are overwhelming should these cottage hospitals be closed.

Mr. Coe: The noble Lord has said that the area health board regions should be coterminous with local authority boundaries. He has rejected the unitary authorities. So that we can judge what hon. Gentlemen opposite are putting forward, could he say how many area boards there would be under his proposals?

Lord Balniel: The hon. Gentleman should have attended the debate on the Maud proposals. In the local government reform recommended by Maud there would be a two-tier system of local government for 42 per cent. of the country. But our proposals for local government reform were debated only a fortnight ago in the House, and I would advise him to read the debate.
Sadly, because of old fears to which the Secretary of State has referred, a line has had to be drawn for the moment between local government and central administration. The Minister has chosen the only conceivable criterion, dividing those services where the prime skill is medical from those services where the prime skill is social care. It is an artificial line. It has no real logic. It is an administrative convenience to overcome a long-standing fear. I hope good leadership of the medical profession and good leadership in local and national public life will one day overcome this fear.
I should like to turn to the decision to reconstruct the system of appointments to the various authorities running the Health Service. I have never liked the monopoly of appointment which rests in a Minister's hands, even though at one time I was appointed to a regional hospital board by a Labour Government. The principle which should guide us here is that those who use and those who run the service should be directly represented, not appointed after having been vetted by the Minister.
Those who use the service are the public, who also pay for it. In a democracy, their representation is best achieved by direct appointment by their locally elected council. Those who maintain the quality of the service, in face of incredibly difficult conditions, are the professions—the nurses, the doctors and the other professions. They must have confidence in their continuing clinical independence, and this independence must be maintained. They also should be directly appointed by their own professions.
Last October, I briefly outlined the structure of the Health Service that I would like to see. I said that perhaps the chairman of the regional authority should be appointed by the Minister, but that there must be firm local authority and professional representation at all levels. The Minister suggests one-third professional, one-third local authority and one-third his own appointees. I have never personally been convinced by the argument that because he allocates the taxpayers' money he should appoint his nominees to the board.
This is not an argument which has found favour in the educational service. No one has suggested that education would be better run if the Secretary of State for Education and Science appointed his nominees to the education committees. Personally, I would prefer strengthening the public representation and also strengthening the professional representation and diminishing still further the Ministerial appointments. I was then thinking that the committees should be composed half of professional people and half of people from the new stronger local government which we intend to establish.
I am not dogmatic about this matter, except that my concept is that the regional

council and the area health boards and the district committees should act like boards of directors in business. Today, the hospital management committees, the boards of governors and the regional hospital boards are too involved in executive decisions which can be better taken by the officers who serve them. Their time is not free enough to take the broader policy decisions which I believe their knowledge of local needs enables them to take.
Finally, I turn to finance. The Green Paper is primarily concerned with administration and only two paragraphs refer to finance. One of those paragraphs tells us that this is a question which will need to be further considered in the light of another Green Paper which the Government intend to publish on local government finance. But the Green Papers which are really needed in the Health Service are pound notes. It is finance that lies at the heart of the problem. Health in this country is starved of money.
The evidence for this is before our eyes. We see overcrowded surgeries, long waiting lists for simple operations—people with varicose veins may have to wait two years or more in some areas—and there is a shortage of nurses. If we are to improve the career structure of nurses and of other professions in the service, if we are to pull down the archaic buildings and give a better service to patients, we must channel more resources into health.
I do not like the American system, but today we are channelling into health a far lower proportion of finance than in America. We are channelling into health a substanitally lower proportion than are most of the Western European countries. I do not scorn private insurance and consider it as a "danger" to the service, Private insurance supplements the Service and draws upon resources which otherwise would be used for private consumption. The Government should certainly consider seriously the suggestion put forward by my hon. Friend the Member for Farnham (Mr. Maurice Macmillan) in the debate on finance for the service, when he suggested making the earnings-related contributions a real insurance, not, of course to support the chronic sick or geriatric wards, or the mentally handicapped, but to meet the cost of everyday medical care for those who are normally well.
The Secretary of State has often said that the Labour Government have achieved an increase in spending on the service. It has been so marginal that it requires a microscope to see it. A true comparison, excluding selective employment tax and allowing for price rises, shows that the real increase in spending on health and welfare in the four years from 1964–65 to 1968–69 was 15·7 per cent., compared with an increase of 14·2 per cent. in the last four years of Conservative Government. I give the right hon. Gentleman that 1 per cent. credit—an increase that has been accompanied by a massive increase in taxation.
But the future projections for the National Health Service are very disturbing for hon. Members on both sides of the House. The White Paper on Public Expenditure, published in December, 1969, shows that between 1964–65 and 1968–69 the average annual rate of increase in expenditure on health and welfare was 3·9 per cent., at 1969 prices. The projection for the future is downwards. Tentative figures for 1971–72 and 1972–73 show that the estimated increase in spending is to be reduced to 3·4 per cent., and that between 1972–73 and 1973–74 it is down to 2·4 per cent.
With this downward projection I fail to understand how we can recruit nurses and halt the haemorrhage of doctors overseas. I fail to see how we can solve the problems of overcrowding and under-staffing in the long-stay wards. Administrative reform, such as is proposed in the Green Paper is absolutely crucial, but financial resources are equally important.
The task of reconstructing the National Health Service is so vast that it will require—to the extent that we can achieve it—a co-ordinated effort. It will not be undertaken by the present Parliament. It will require encouragement and not only lip service to the great voluntary spirit, which in many ways has sustained the administration of the service for the past 20 years. It is the same voluntary spirit that has brought comfort to patients and helped the unfortunate in their homes.
It is of paramount importance that so far as possible we should try to obtain agreement between those in the medical profession, whose service is to individual

patients, and those in local government, whose service is to the public in general. I do not imagine for a moment that full agreement will be reached, but let us all approach this task with a generosity of spirit and an understanding of the wider scene that will constructively assist the House in the task of recreating a National Health Service of which we can be really proud.

5.25 p.m.

Mr. Will Griffiths: The noble Lord's speech was that of a political schizophrenic. He began by attempting to make a dispassionate analysis of the Green Paper, on the principle that it is a discussion paper—apart from the policy decisions concerning the setting up of area health boards and so on—but in the penultimate part of his speech he suddenly remembered that there may be an election this year and he accordingly began to assail my right hon. Friend and the Government about expenditure on the National Health Service. I had intended to refer to that subject at the end of my speech but I cannot resist taking up the noble Lord on that question, while pointing out that I agree with some of the other things that he said.
It must be understood by all hon. Members that the amount of money being spent on the National Health Service currently—including last year—whether regarded in financial terms or as a percentage of the national income, is the highest since the service was introduced. I cannot do better than Quote a note—now somewhat out of date—from the Office of Health Economics, which from time to time provides us with some very interesting information about all aspects of the National Health Service. As long ago as January, 1969, in a hand-out which I am sure was sent to the noble Lord, as it was to me and other hon. Members, it said:
The proportion of the national income spent on the National Health Service exceeded 5 per cent. for the first time in 1967. The figure was 5·12 per cent., which contrasts with 3·89 per cent. in 1954, which was the lowest for any year.
My recollection is that the noble Lord and his hon. Friends, and not my right hon. Friends, were in office at that time. I shall leave that question for the moment and return to its local application to my


constituency and the Manchester region if time permits.
Most hon. Members would agree with the noble Lord in what he said about the administrative structure and the importance of people working in the National Health Service. We should not forget what we are trying to do in our discussions about the future of the service. Our approach should be based on what is best, all round, for the patients. I entirely agree with the noble Lord about that. From time to time hon. Members and people outside lose sight of the essential truth.
Whatever criticisms I have to make of this Green Paper, I infinitely prefer it to the Green Paper Mark I. I shall try to remember that, apart from the clear policy decisions laid down in the Government's latest Green Paper, it is still a discussion document. Some passages in it are woolly and vague, and call for clarification. The fact that it is a discussion document does not completely exonerate the Executive from giving their interpretation of some passages in the document, for which they are responsible. It is right to probe their intentions.
As the noble Lord said, the Green Paper is concerned largely with new forms of management. Only two sections of the document refer to finance. We are not primarily discussing finance today, nor are we concerned with the scope of the service, or the functions of its various branches and how they are operated by professional and technical staffs.
As the Secretary of State began with a look hack, perhaps I might do the same. I am one of the very few hon. Members who served on the original Standing Committee on the National Health Service Bill. I can see one other hon. Member who was here at that time. My right hon. Friend was right to say that Aneurin Bevan faced a very difficult task in deciding the administrative structure. He created the regional hospital boards which were responsible for appointing the management committees, the executive councils for the family practitioner services, and the pharmaceutical, dental and ophthalmic services which were and are under contract to these bodies.
The Secretary of State was correct to say—he did not use these words, but

they approximate to my own views—that this was due to the existing unevenness of local government. Although there were local authorities, like the L.C.C. or my own in Manchester, with considerable experience of and expertise in hospital management, the majority had no such experience.
Then there was the highly political atmosphere of the time. Whatever virtues hon. Members opposite now see in the National Health Service, the then Opposition voted against the Second Reading of the Bill, and opposed it vigorously, as they were entitled to do, in Standing Committee, and voted against Third Reading. That was a very political controversy——

Mr. Worsley: I am sure that the hon. Member would not wish to mislead the House, but would like to point out that the opposition of the then Opposition was a reasoned Amendment, and not opposition to the principle of a comprehensive Health Service.

Mr. Griffiths: I always thought that after a Bill had left Committee, if any party voted against Third Reading it was rejecting it in total. There is no question of a reasoned Amendment on Third Reading. That is Parliamentary practice.
So there was this unevenness of local government, the professional dislike of the whole concept of a National Health Service, and the political climate in which it was introduced—not unrelated to the character and personality of the Minister, Aneurin Bevan. But, despite the faults which have emerged in its administrative structure, the service has generally worked remarkably successfully. After all, all this took place in a period of great problems, over a Bill which was going through less than a year after the end of the war, and which came to be administered as early as July, 1948.
As for central power, one important principle insisted upon by the Minister and accepted by the Government was Parliamentary accountability for every detail of administration. If this should have been done, to some extent at least, with the nationalised industries, a much greater number of bureaucratic malpractices might have been uncovered, and we might occasionally have been able to parade the triumphs, as we have been


able to do with the National Health Service.
When this was decided—the Government of the day were not unanimous in support of this principle—many people said that the Order Paper would be cluttered every Health day with a mass of trivia, and that there would be no serious questions. All hon. Members used this opportunity to expose or parade administrative shortcomings and mishaps which in those early days caused their constituents discomfort. There is nothing wrong with that. That is part of what the House of Commons is about. In a very short time, however, despite the political climate, the trivia were removed from the Order Paper and, in the main, serious questions were put down.
But there has been increasing irritation with the administrative structure and, above all, with Ministerial appointments to regional hospital boards. Ever since I have been in the House, and irrespective of which party was in office, strenuous representations have been made to hon. Members, especially by their political friends outside, that the Minister of the day was engaged in a conspiracy with his political opponents to put as many as possible of them on regional hospital boards. I am sure that this has been said as much to hon. Members opposite as to me.
The truth is that hon. Members present who have had some experience as Ministers of considering appointments know what an impossible task it is to make selections which are correct and which satisfy. We have all suffered these pressures, and we know that this business of appointing regional hospital boards goes down the line. At the lower level, they are the bodies which appoint the hospital management committees, and they are not susceptible to democratic processes either.
Of course, as the years have gone by, despite the quality of the people who may have been appointed—many good people have served on these committees and boards—they have increasingly come to be regarded as the instruments of the Minister and not the representatives of the people. I am not saying that members of hospital boards lack quality or dedication; I am simply saying that they

have not appeared sufficiently representative of the patients and the community. This probably springs to some extent from their sheer size—the number of authorities and the vast areas which they have to administer.
Shortly after the National Health Service began, I realised the virtues of an elected management. I have always looked forward to the day when these bodies could be linked with reformed local government. The Minister did not say that that had been recommended by the Royal Commission, which, in fact, recommended that they should be linked with reformed local government.
In any event, the Government have reached three firm policy decisions on the National Health Service, whatever else is open for discussion. As the noble Lord said, it will probably be for a later Parliament to put those decisions into operation. First, the Government have rejected the concept that the Health Service should be administered by local government. Secondly, they have designed the instrument of area health authorities—primarily responsible to the Minister and, through him, Parliament—to be "closely associated"—the words of the Green Paper—with local authorities. Thirdly, they have decided that administrative boundaries should be drawn between the N.H.S. and the instrument of the public health and personal social services and be contiguous to the unitary authorities envisaged in the Radcliffe-Maud Report.
The area health authorities must match the proposed local government boundaries, of which the noble Lord and hon. Members generally will approve in principle. As the noble Lord reminded us, these proposals are for comment before decision. I therefore wish to concentrate on examining the rejection of local authorities. I would have thought that the noble Lord, having complained about increased central power, would have considered as a possibility the local authority being precisely the instrument necessary to avoid any further development of central power of the type of which he was apprehensive.
Why have the Government rejected the local authorities? The Minister gave four reasons, and the final one I regard as the decisive reason. Why it was given last I do not know. The professional


objections and the call for clinical freedom led to this decision. The Minister talked of local government finance and explained what a costly business the alternative decision would have been. I do not think that it would have been insuperable, since a way could have been found to transfer funds from the central authority to local government to meet the additional expenses.
In 1948 the Minister of the day had to give way to professional prejudices, and the situation which faced the Government then—I suppose that the same situation faces the Government now and will face any Government in the immediate future—in the immediate postwar period was that if he did not yield to, for example, higher grades of consultants, there would have been difficulty. The consultants said, in effect, "If you do not allow us to have part-time appointments under the Health Service, we will walk out and form a rival Health Service". That pressure does not apply today.
What I particularly regret about the immediate past is that no Government have made a determined effort to end that dichotomy in the consultant service. This has led to some of the worst irritants in the service because of the twin loyalties of the market place and the Health Service, and this has led to queue jumping. I do not wish to exaggerate the problem, but in some cases if one consults a doctor privately it is extraordinarily easy to get a bed in the public ward of a hospital more quickly than by joining the queue at the out-patients department.
It is known in virtually every constituency that some—I insist not all—consultants with these divided loyalties turn up late for clinics at public sessions. This is a scandal in many places. It all stems from the retention of the system which the then Minister was obliged to adopt in the early days of the service. That is what I believe "clinical freedom" means. It means that one need not always play the game in the way that many full-time consultants play it.

Mr. Arthur Jones (Northants, South): I was interested in the two definitions; namely, clinical independence and that which stems from professional independence.

Mr. Griffiths: I was dealing with the question of clinical freedom mentioned by the Minister.
I am tempted to raise many items concerning the service but I will be brief because many hon. Members wish to speak. One item with which I must deal, however, is that of local participation. It is right to stress the need to involve more people at the lowest possible level in the N.H.S. Despite what I have said about parliamentary accountability, we still do not have this question of participation right. The fact that an hon. Member can table a Question does not prevent the vast majority of citizens talking about "them" and "us" from the point of view of the N.H.S. We must do better in future to involve more people in the service at the lowest level, because at present they are too remote.
I would have preferred elections for people at health authority level, and I do not accept my right hon. Friend's arguments as being wholly convincing. I still believe that local health authorities could have been elected, but I regard the professional objections as being the most serious barrier to that.
Leaving that aside, and turning to the district committees—there is much vagueness in the Green Paper on this issue—I suggest that at this level, as the Green Paper envisages, half of the district committee people could come from the health authorities and half from other members of the local community. I see no reason why there should not be elections for them. We would not get exclusively people from political parties standing for election at district committee level. Instead of the occasional scandal appearing in the newspapers about something having gone wrong in one or other department of a general hospital, we would have people who are particularly concerned about their local district hospital taking an interest in whatever matter might be causing difficulty.
The story of the last few years, looking at the Government's achievements, has been quite good. I have been somewhat surprised to learn that, despite what we say about shortages in the professions supplementary to medicine because of the bad pay—I am thinking particularly of occupational therapists, speech therapists, radiographers and so on—in the Manchester region we have, according to the


latest report, more of these people in employment than ever before. We have more consultants and more outpatient attendances. Completions of big schemes under the hospital building programme have been progressing annually at a gratifying rate.
I do not say that all this has been done since 1964, but I wryly think, despite what is frequently said by hon. Gentlemen opopsite, that not even Governments can stop progress. Progress has indeed been made. I hope that we will get the administrative structure right so that, in future, the N.H.S. will remain, even more than it has been in the past, the envy of the world.

5.50 p.m.

Mr. R. H. Turton (Thirsk and Mahon): The memory of the hon. Member for Manchester, Exchange (Mr. Will Griffiths) is not quite right. He must remember that on Third Reading of the National Health Bill it was because the Conservatives felt that there were certain defects in the plan, particularly in respect of the hospitals, that they moved a reasoned Amendhment. They were in favour of the plan for the Health Service, which was, in fact, the wartime Coalition's plan. Apart from that one exception, I find myself in agreement with the hon. Gentleman.
This Green Paper is a great improvement on that issued by the right hon. Gentleman the Member for St. Pancras, North (Mr. K. Robinson). The noble Lord the Member for Hertford (Lord Balniel) talked about the Persian satrap and his herd of little elephants, and I think that in the Green Paper we have a top-heavy administration. We have the Minister, and then we have the regional offices, which, according to paragraph 90, are for some reason to be strengthened, presumably in numbers. In my experience in the Ministry I found it much wiser to diminish the numbers in the regional offices, and try to deal with problems more effectively from one central Department rather than have a large number of somewhat overmanned regional offices.
The peculiar paragraph 60, to which my noble Friend also drew attention, states:
The central Department will need to concern itself more closely than in the past with

the expenditure and efficiency of the administration at the local level.
Therefore, although we are getting more points of local contact in the 90 area health authorities and the 200 district committees, we are getting more centralised control, and more control at regional level with the regional office and the regional advisory councils.
To me, the last stage is worse than the first. From my experience in the Health Service I have always felt that we want to try to get over the difficulty of the regional hospital boards and management committees and as far as possible deal direct between the Minister and the district hospital. The weakness of the Green Paper is that the Minister falls back on a system of over-centralisation.
Looking back at the Health Service over, let us say, the last 15 years, so as to be completely non-party, the two dominating disadvantages have been too much remote control and too little finance. The two are inter-connected. The more remote the control the more the central Government look for uniformity, and the more one searches for uniformity the greater the extravagance of the expenditure and, therefore, the greater the gap between the amount of finance a Minister can get from the Treasury and the amount he needs to achieve uniformity. All these Reports and Green Papers are based on the assumption that health requirements are completely uniform and do not vary from one area to another.
In this connection the Bonham-Carter Report provides a very good illustration. Paragraph 26 recommends that the district hospital should serve a population of from 200,000 to 300,000. That is a perfectly credible recommendation if one is dealing with congested urban areas, but it is complete nonsense when one is dealing with a scattered rural area.
Again, paragraph 33 of the Bonham-Carter Report says that there is a good case for closing down a large number of small hospitals. Translated into £s, shillings and pence, that statement means closing down a number of small acute hospitals where the cost per patient per week is round about £40 and sending the patients to the larger hospitals where that cost is £50 a week. I take my figures from last year's hospital returns.
The result of that one operation would be additional expenditure of £4 million on the health bill, which is the very reverse of what we should be seeking to do. I therefore believe that the House, looking generally at the problem of the administration of the Health Service, should consider whether we are not really misdirecting it, and spending our time planning to build more and more expensive hospitals without considering the most economic way of looking after patients at the present time.
In the large hospitals, which are doing wonderful work, there is a great waste of patient care. The patient has got over his operation and is shuffling round the ward in a dressing gown when, though requiring nursing care, he does not require the £50 per week treatment. What we need is far more of the convalescent or, in some cases, long-stay hospitals which could care for these patients, not at £50 per week but probably at £30 or £36 a week.
When we look at the hospital structure and the way in which the hospital building plans are going forward, this aspect does not seem to have been considered. Therefore, when those concerned are considering a new structure for the Health Service, I believe that they should ask themselves whether we can give the area health authorities more financial power so as to encourage them, when considering their hospital plans, to think in terms of what is most economic in the interests of the patient.
One could consider a decentralisation from the Minister direct to the area health authorities and committees, giving them much more a block vote, and telling them, "You will be allowed so much money, and if you want more you must raise it by your own efforts." If we did that, we could cut out a great deal of the unwieldy superstructure of the regional offices and the regional advisory councils.

Mr. Crossman: I could not agree more with the right hon. Member for Thirsk and Malton (Mr. Turton). That is what I meant when I said that we would expect each area health authority to make its own budget and submit it. We shall consider block budgets. As I say, I could not agree more with what the right hon. Gentleman has said about devolution.

Mr. Turton: I am glad to hear that. It follows, therefore, that area health authorities must have powers to raise money for their hospitals.
We are not using to the full the good will, good neighbourliness and local charity of our hospitals. I look back to the old, wicked, pre-1948 days. One thing that has always worried me has been the disappearance of local good will to the local hospital. The local tradesman always sold everything to the local hospital at cost price as his form of contribution. That has all disappeared, and with its disappearance has come a great deal more expense in administration.
I agree that we have to have a dividing line somewhere in health and welfare. If one were not to accept Seebohm and not to accept the Minister's Bill, it would be much more economical to run the Health Service. One of the reasons why we have an unduly expensive Health Service is that we have not enough welfare hostels. Old people who should be in welfare hostels are in long-stay hospitals. The long-stay hospitals are all full and, therefore, cannot take people from acute hospitals when they have recovered from operations and cannot get a bed elsewhere. It is not the expensive provision of £50 per patient per week that we require, but places in the small welfare hostels to look after frail old people who are now going into other forms of hospital.
Until now I have spoken mostly in terms of £s, shillings and pence. What is far more important is to state it in terms of humanity. The system we have at present of removing old people when ill far from their homes is a form of barbarism which succeeding generations will find very hard to understand. That is why I am sure the Minister is right to establish more points of local contact by area health authorities and district committees. If he can give them the power, as he said he will in his intervention, to use their money not in the provision of more expensive hospital beds but in dealing with the problem of the geriatric and the convalescent he will be tackling the two weaknesses in the Health Service as it has developed.
This Green Paper is a great improvement in dealing with weaknesses in the present Health Service, which has been.


able to survive miraculously by the multitude of inter-connected committees. When we move away from that do not let us replace those committees by more regional staff, more regional advisory councils and top-heavy administration at the centre. That is not in the interests of the patient or the country.
I hope that the Minister will reconsider the Green Paper in the light of all the observations made in this debate bearing in mind that the speedy recovery and general welfare of the patient depend on the individual care given by the doctor, the nurse and the hospital, and not on a uniformity of administration and central control. That is the mistake we have made previously. I do not put party blame on it. We have all been too inclined to think that this is a tidy administrative structure. We should cut out much of the administration and leave it to the nurses and doctors to work out what is truly in the interests of the patient. I wish the Green Paper well, but I think it will require considerable amendment.

6.5 p.m.

Mr. Laurence Pavitt: I am grateful to the right hon. Gentleman for Thirsk and Malton (Mr. Turton) for the fact that one or two points I have made recently in the United States of America he has confirmed and that is that the National Health Service is no longer a matter of political controversy. Each party seems to claim credit for the Service. This has been done by the Labour Party in 1946, by the Conservatives in Coalition for the 1944 White Paper and the Beveridge Report, in 1934 by the Somerville-Hastings pamphlet claimed by the Labour Party, and the Liberals, who say that it all started by Lloyd-George in 1911, anyway. So we all finish happy.
I rejoice in the categorical statement made by the Secretary of State in introducing the Green Paper today, showing that he has got away from the dominating thought of hospitals—the Dr. Kildare or Emergency Ward 10 syndrome. Since Nye Bevan, every Minister has been completely absorbed by hospitals. The need is to talk about health rather than illness. My right hon. Friend went further by underlining the point being made in the

Green Paper, that he will give priority to domiciliary rather than hospital care.
The noble Lord the Member for Hertford (Lord Balniel), with my right hon. Friend, seems to have promoted me into a satrap. Obviously, the Secretary of State had been receiving advice from many quarters, but I have been under the misapprehension during the last few years that I was a voice crying in the wilderness on some of these matters. I therefore rejoice that a large number of points made by me, as Chairman of our Health Group, and by hon. Members on this side of the House, about Green Paper Mark 1, have found their way into Green Paper Mark 2.
A decision has to be taken and my right hon. Friend is seeking our views on this Green Paper before deciding on the contents of the White Paper he will publish in the summer. He has given all interested parties until the end of May, but this is time enough, for there has been much discussion on these problems and the basis of this debate goes back a long way. It goes back before November, 1967 and the announcement by my right hon. Friend the Member for St. Pancras, North (Mr. K. Robinson), the publication of a Green Paper Mark 1 in July, 1968, my right hon. Friend's, and the announcement closing the debate in February, 1969. As the noble Lord said, this went further back to the Porritt Report of 1962 and I think it also goes back to a Fabian pamphlet which I wrote in 1962, and even before that, to 1957, when the Royal Commission on doctors' pay was established. A great many of these problems had reached general agreement. The tripartite structure had served its purpose and it was overdue for reconstruction.
This Green Paper is mainly about machinery. My right hon. Friend has sought to grapple with a problem which affects not only the Health Service, but all spheres of national activity. In an increasing technological and computerised society, how do we equate efficiency with democracy? How do we centralise for efficient management, yet decentralise in order to participate? My right hon. Friend has made a number of assessments and has had to come to a number of very difficult decisions. The warning which the House should give him this afternoon is that if the part played by democracy


has the form without the substance this will lead to the undermining of his best wishes and aspirations stated in the Green Paper.
In health, perhaps more than in any other sphere of Government administration, we should get the acceptance and involvement of the individual, as my hon. Friend the Member for Manchester, Exchange (Mr. Will Griffiths) so aptly said. This is a bottomless pit in terms of finance. The amount of resources needed will be ever-escalating. The only way in which my right hon. Friend can command them is by those who pay being willing to pay. There is no other way than, in the main, their being paid for by taxation, but underlying the whole question of restructuring and the various points with which the Green Paper is concerned is the philosophy of Nye Bevan, the original architect of the Health Service: where rests power and how do we use it? When Nye Bevan wrote his book "In Place of Fear", that was the central theme, and it will be the central theme of my speech.
Power is a stark, naked fact of political life. Unless we are able to make effective use of it in the Health Service, all we will do is to juggle about with the furniture instead of restructuring the building. I base my remarks on six power points we must plug into. First, power is the quantity of money and how or who allocates it. I rejoice in the clear-cut reaffirmation by my right hon. Friend, as a principle, that the healthy pay for the sick.
We must accept that the only way in which a comprehensive service can be paid for is comprehensively. Although I prefer that should should be met by taxation, I accept that its being met in the form of graduated contributions is a solution that might well emerge from the discussions that arise as a result of this Green Paper. Provided that it was geared to people's ability to pay, it might well be a contributory factor to the involvement that the Green Paper seeks. The advantage would be that the amount of contributions being paid would be clearly seen as a payment for the service being received.
If this were done, it would need massive publicity. It would mean that the various organs of which the Green Paper speaks would somehow or other have to ensure

that it received publicity. Unless the people could be made to understand that the Health Service is a service for the people and that what they get for their money is their own hospitals, their own doctors, their own local authority services, and that of all family expenditure this is the best bargain at present in Britain, the contributory system would be merely part of the deduction from the pay packet which people would resent having taken from them, in the same way as direct deduction from their pay at the moment is a political counter which will no doubt be considered by my right hon. Friend the Chancellor of the Exchequer in his Budget.
I draw on my recent experience in lecturing to American universities in looking at some of the points made by the noble Lord as to additional ways in which the new structure could well find its money. I discovered in America that the more one leans on insurance the worse it is for the middle class. This is a direct prescription for mental stress, as to whether one has enough Blue Cross or Blue Shield cover to meet commitments which might arise.
Next, it makes for a tremendous increase in bureaucracy when there are about 50 items of articles of medication and treatment each priced and for which a claim has to be made. It is a bureaucrat's paradise when a patient can have so much according to what the complaint was or what the medication was. With Medicaid and Medicare the American system faces the problem of how to get value for money. They still have much to learn from us.
On this problem of money and resources, the Green Paper outlines the possibility of a much better organisation. The noble Lord was wrong to talk about the reduction of funds for this. For the first time we have pushed it up over 5 per cent. of the gross national product. Next year it will be 5·3 per cent. It is £132 million more this year than it was last year. So I could go on.
My second power plug is the point made by the Green Paper that the "service should be centred on the family doctor team". We have been saying this in the House for the last 10 years. Until now it has been mere platitudinous nonsense: we have talked about it, but nobody has done anything about it. The family doctor has not been given the


ancillary services and aids. We have said to him, "You are the leader of the local authority's team" but we have given him no team to work with. He has been a leader without any followers. If the Secretary of State means business, this could be the most important section of the Green Paper.
This would mean, first, that the Secretary of State find the resources to give the G.P.s the tools for the job. He must look closely at clinical medical assistants as well as at other forms of assistance. Secondly, my right hon. Friend must not just talk about transferring from institutional to domiciliary care. He must actively plan the functions that the G.P. can perform in relation to those at present done in hospitals in such a way that the G.P. has the tools and diagnostic aids for the job he has to do.
Third, my right hon. Friend must almost immediately go into negotiations with the General Medical Services Committee as to how this kind of target can be achieved over the next four or five years in a phased fashion; because it will not be done by just issuing either a Green Paper or a White Paper. Hard, solid negotiations will be needed with doctors and administrators inside and outside hospitals. The Green Paper gives the opportunity for those negotiations to begin.
The third point on power is the fact that the most important of the three structures my right hon. Friend is suggesting is that of the area health authorities. This, again, is absolutely right. Paragraphs 18–23 reach a very firm conclusion about administration by local government. This is not the last word on the matter, but it is certainly the first one and it is a very formidable series of arguments which my right hon. Friend has mounted and which have been debated this afternoon.
Like my hon. Friend the Member for Manchester, Exchange, I recognise that the doctors have real fears about their clinical freedom, but I think that they are absolutely groundless. In 22 years none of their fears about their right to prescribe and about whether or not they would be civil servants—under any Government and under any Minister—has materialised. I accept that some attention must be paid to their fears, but

it is about time that they moved to a more constructive position in relation to the way in which they will co-ordinate and work with local authorities, either under this scheme or under any other.
The most important thing in this section of area health authorities which may well have led to my right hon. Friend's decision is not any of the three major points mentioned in the Green Paper, but that in a highly complicated and technical service it is essential that, if power rests with the area health authority, there shall be some persons on that body with administrative skill, overall vision and judgment capable of being the peers of doctors and very highly trained administrators, if necessary capable of talking down to consultants instead of talking up to them and being overawed of them.
I know that not all of my medical friends will agree with that judgment. In the past there has been too much fear of the consultant and specialist as being almost a Lord Almighty in the hospital service. What my right hon. Friend has done in this section is to leave himself freedom to ensure that on each of the 90 boards, or however many we finish up with, there will be at least a hard core of people who have the time, knowledge, energy and experience, to play a part on these boards.
In this regard I welcome my right hon. Friend's break-through in paying the chairman. One of the great defects of regional hospital boards has been that we have expected chairmen to work three full days a week for nothing. I welcome the fact that there will be at least one person on the area health authority who will have the time to devote to a job which is so important.
I welcome, too, in this section the fact that the professions will appoint their own people and that these people will not be chosen for them. There is always the fear that if a political Secretary of State chooses doctors he might choose his man and not the other man, so to speak.
However, I ask my right hon. Friend to go a little further and ensure that not only doctors but all hospital workers are represented. The Green Paper mentions dentists and nurses. What about the professions supplementary to medicine, whom my hon. Friend the Member for Manchester, Exchange mentioned? What


about the workers? One of the most able men on the Central Middlesex Management Committee was a porter at another hospital in the area. Because of his knowledge of portering and what it meant to the organisation of the hospital's work, his contribution was invaluable.
I add my reorganisation to the 25 committee men spoken of in the Green Paper. I agree with my hon. Friend the Member for Manchester, Exchange that more weight should be paid to the elected side. There can be a number of variations on this theme, but my variation would be 13 coming from the local authority and, therefore, links back to election and being elected over three years in some form or other. Six from the professions would be an adequate number to ensure their clinical freedom. Six including the chairman, to be appointed by my right hon. Friend the Secretary of State would take care of the point that I have mentioned as to the knowledgeable people that I want included.
Before a White Paper is issued there will have to be a number of discussions as to whom does what. I welcome the details in paragraphs 36 to 40 which give a fairly clear indication of some possibilities along those lines.
I am inclined to agree with the noble Lord about the top tier of this structure—the regional health councils. The composition is most vague. I do not see why the members should not be elected from the area health authorities in their entirety. The function I can understand very clearly as being mainly planning. This is a similar pattern to what hon. Members opposite did when they reorganised London government by putting planning under the Greater London Council and transferring many of the other powers to the London boroughs.
The key point is whether the area health authorities will get their money direct from the Minister or from the regional health councils; because who commands the cash, he pays the piper, he calls the tune. One of the lessons we have learned from the regional hospital system is that once the money has been allocated by the regional board room for management at local level is very small. Therefore, the key will be who allocates the cash. I should like to see some more accountability of these councils. Why not an annual meeting

of all the health authorities in the area to pass resolutions and to receive the annual report of the regional council and to elect it?
The weakest point, and one of the most important, is power point No. 5, which is the participation in the locality. This seems to me to be lit by a 15-watt lamp. it is important to have participation, but the committee which has been put together with half coming from the area health authorities, while the other half is left vague, seems to me to have power to do nothing. It has functions which one cannot describe. It has no delegated powers by Statute, no separate budget and its job is to pass on information to whom and to what—to the area health authorities or into limbo?
In my long experience, a committee without power is a waste of time. As this section of the Green Paper stands at the moment this is really the form without the substance, and it will be necessary to give it more body. The White Paper which is promised in the summer will neglect this at its peril. There are available tremendous reserves of voluntary workers—not just vague dogooders. Half could be elected at an annual towns meetings, and here local Members of Parliament could play their part. One would expect all the voluntary societies like Leagues of Hospital Friends, Spastics, etc. to attend.
The last power point rests in the hands of the electors at the General Election. The likelihood is that the implementation of legislation will be in the hands of the Government who follow this one. Listening to the noble lord, I am not worried too much. It would seem that so far as the tripartite system is concerned, the same restructuring will continue whichever party gets into power.
There are other matters with which I have not the time to deal now. One concerns the Ombudsman on which the Green Paper touches, and which is still waiting for decision. The other matter is that passing reference is made to occupational health but it does not develop the theme at all. I hope that the White Paper will go further. Basic to the question of the future of the Health Service is the argument on prescription charges. It would be appalling if the Green Paper were to go forward on the eve of a


Budget, when the nation is able to spend£1,690 million on beer, gin and whisky, £1,578 million on cigarettes, £2,230 million on gambling and bingo, and if we cannot find the means to relieve the chronic sick, of paying for their necessary medicines while we are increasing the number of motor cars and colour television sets in the possession of families. I shall be ashamed if my Government are powerless in this respect.
We are occupied with a multi-storey building. The foundations of the ground floor and the first floor were erected by that superb architect Nye Bevan. This Green Paper provides the ceiling and the floor above for the building which is to follow. Even more important is what we and other hon. Members make of this in the next 20 years to come.

6.22 p.m.

Sir John Vaughan-Morgan: Until the hon. Member for Willesden, West (Mr. Pavitt) made his speech, hardly anyone had mentioned the subject of hospital staffs. It is a sobering thought that while we debate the structure of the National Health Service, 750,000 workers fortunately go about their duties totally regardless of anything that we say. It is a case of "Regardless of their fate the little victims work." I agree with every word that the hon. Member said on that point.
I congratulate the right hon. Gentleman the Secretary of State on the great improvement in the second edition of the Green Paper. The nub of the Paper is that co-ordination or integration, or whatever word one chooses to use, should take place on something equivalent to area level. We sometimes exaggerate the difficulties of the present division. In fact, most field workers do not really mind whom they are responsible to, and the telephone in the long run has done far more for co-ordination than any statute ever written. But that is not to say that it is not right at this stage to rebuild he Health Service on the basis of an integrated service at area level.
I should like to say a word or two about membership. I entirely agree with the introduction of elected members. I appreciate the situation in which this change has had to be made. It is right. But I echo what the hon. Member for Willesden, West said. I speak as a satrap.
I speak with a little knowledge of boards and committees in the Health Service. We have to remember that nearly all those boards or committees carry a certain number of passengers. The work—and there is a great deal of it—usually devolves on the willing horses, and whatever one may say about the present system of appointment, it has made it easier to ensure that there are enough people to do the extraordinary number of jobs that fall to the board or the hospital management committee or whatever body it is.
Therefore, I agree that it is important that the Secretary of State should continue to be able to appoint enough people to do that part of the work. I will not say any more on that subject because I might get into a rather tactless sphere if I did. I am very glad, for that reason, that the right hon. Gentleman has resisted the hand-over to the local authorities. Apart from all the other arguments which have been advanced, I do not think it is possible totally to devolve to an independent authority. For one reason, which has not been mentioned so far, there is the staggering speed of change which is continuing in medicine the whole time, which demands a degree of centralised planning and expenditure on equipment and buildings.
Turning to the Green Paper while I agree with the main theme I must point out that it is full of omissions. I echo every word said by the hon. Member for Willesden, West about the occupational health service. I find this an extraordinary omission in the Green Paper plan for taking over the school health service. But, by the same token, why not take over the occupational health service? In paragraph 38 we are told that it is the property of another Department.
Let us see what is said in paragraph 31 of the Green Paper. There are two sentences which I should like to quote:
… the Government has decided that the services should be organised according to the main skills required to provide them rather than by any categorisation of primary user.
That applies just as much to the occupational health service as to the school medical service.
The paragraph goes on to state:
The scarce skills of professional people will be used to greatest advantage if those of each profession are marshalled and husbanded by one agency in each area. Moreover it will


more often be possible to provide for users the advantages of continuity of care by one professional worker of any one discipline.
Every word of that passage applies to the occupational health service.
If that is not good enough, the right hon. Gentleman's own Green Paper adds, in the next paragraph:
The risk of duplication of services will also be avoided and there will be opportunities for improved efficiency in the use of medical, dental and nursing staff.
Yet we have this tragic missed opportunity. I can only assume that once again, not for the first time in history, the Department of Health and Social Security has been defeated by the Department of Employment and Productivity. I suppose that one could put it in another way and say that the Elephant and Castle has met its Waterloo in St. James's Square.
I hope that before we get the White Paper we shall have at least some argument for the present division of the service. If not, I hope that Parliament will call the Government—whichever Government produce the White Paper or the Bill—to book for this omission.
There are other omissions more relevant to the existing National Health Service. One is the problem of the postgraduate hospital, but I understand why no detailed reference is made to that. There is, above all, the problem of London, which is relegated to an appendix. I know that this is being considered by a committee under the Minister of State, but it is not quite fair to describe the problem of London as one of chaotic services.
Even though it may not suit the planning mind, the problem of London is one of over-abundance of services. Before any too radical change is made which may affect the existing structure, I hope that the right hon. Gentleman will bear in mind the words of, I think, Aristotle, that one can but slowly dischard the chains of historical circumstances. This applies very much to the problem of London.
But the largest indeterminate area in the Green Paper is the question to which my noble Friend the Member for Hertford (Lord Balniel) referred—the rôle, status and constitution of the district committee. I gathered from the Secretary of State's speech that there will be a definite step forward and that the areas will be

instructed to create the districts, if one may put it that way, before they go any further. But it must go even further than that. I notice that the Minister of State made a remark which is eminently quotable, that the basic organisational unit in the integrated service will be the district general hospital and the community services around it. In other words, the district will be the unit of fundamental importance.
Paragraph 54 of the Green Paper sets out some details of district committees, and rightly says that their functions require study. That is one of the understatements of all time. They do indeed. Many people are wondering how the ordinary day-to-day administration of hospitals will be carried on if the area is the sovereign body. What, for example, will be the rôle of the hospital secretary at the district hospital? What will be his relationship with the other officers? Will the catering officer in a large, 1,000-bed hospital be responsible to the area or to the hospital secretary? As I understand it, there will be only an advisory committee at the district level, and the employing authority will be at the area——

Mr. Crossman: I thought that I had made this clear. I said, and I say again, that at the district level we shall have, I think, a statutory provision for administrative devolution. It is not true that it will be just advisory. On the contrary, it will be a sub-committee whose duty it will be to run the district. It will be given specific powers by the big committee, and it will report back, no doubt, once a month, but it will be, de facto, in charge of the district.

Sir J. Vaughan-Morgan: I am grateful to the right hon. Gentleman for spelling this out. This has caused many misgivings throughout the Service, particularly among people who have not known who their boss would be.
Who will employ the consultants? Will it be the area or the region? The Green Paper says that the region will be responsible for the deployment of senior hospital staff; but will it be responsible for their employment as well? This is left a little vague.
I had not intended to say much about teaching hospitals, because of my obvious interest, and because I know that they


will have full opportunities for consultatation. Whatever the fate of the consultants in the district hospital, the right hon. Gentleman must consider carefully the position of consultants in teaching hospitals—whether they will be employed by the area or by the region or, better still, by their own hospitals. If they are to be employed by their own hospitals, we may need very detailed further consideration of certain parts of the Green Paper.
I was glad to see that, in a speech at Southampton, the right hon. Gentleman discovered
how rightly sensitive teaching hospitals and universities are to any changes, that they may be submerged in a remote regional structure or lose the intimate contacts with the Secretary of State which give them a valuable feeling of independence.
I could not have put it better. I was delighted to read that speech.
These contacts are not only valuable, but vital. Where there is this relationship of the two disciplines of the Health Service and education, we must have these contacts and there must be a degree of independence in the twin body which is not necessary in anything else. I know that teaching hospitals are not always popular with their fellows in the district, that they are considered to have privileges—to some extent they have—but we must recognise that on these privileges depends the future not only of the teaching hospitals themselves but of the whole Health Service. They are quite right to demand such privilege. I was delighted to read this speech, because the right hon. Gentleman to some extent made our point.
Paragraph 54, for example, makes no provision for university representation on a district committee. There is to be special university representation at the area level, but rumour has it that it will be only one member. I hope that, at the district level, it will be substantially more where a teaching hospital is involved.
I should like to suggest—I hope that the right hon. Gentleman will not close his mind to this—that there should be statutory recognition of this difference by means of some provision for special district committees where a teaching hospital is involved, as was done in the 1968 Act, which established the precedent of the university hospital.
I will take up some of my other points with the right hon. Gentleman another time, since many hon. Members wish to speak. I want to conclude with a word about staff. For the 750,000 staff the next four or five years will be a period of difficulty, whatever happens, so I welcome the appointment of a staff commission such as is outlined in Chapter 8. I am not certain what it will do but it may help to alleviate some of the sensitivity which exists among staffs as to how the changes will affect their future prospects.
The Green Paper says, more or less, that all negotiations will continue through the Whitley machinery. The right hon. Gentleman himself by now realises that very many people are growingly dissatisfied with the Whitley machinery. It frankly creaks: one cannot say anything else. Many of our troubles in the Health Service have come from this cumbersome machinery. There has been peace in the medical world since the Kindersley Committee was set up. I should know. I was the Parliamentary Secretary to the then Ministry of Health when it was set up, and to this day I remember my very good friend, Dennis Vosper, then Minister, now dead, confronting the members of the medical profession to tell them that there would be a Royal Commission. I have seen people so angry.
But out of that recommendation has come a great deal of good. The Review Body has done a marvellous job. We shall never solve the staffing problems of the service until we have a review body for all the other employees in the National Health Service as well. This cannot be done by the ordinary machinery of consultation, which causes too many difficulties. I shall not enlarge on that now, but before the White Paper comes along I should like to see a step in that direction.
I believe that the White Paper is scheduled for July. A great many negotiations have to take place before then and it is not impossible that, when the Paper is published, I shall not be in this House to discuss it. I certainly shall not be here to discuss the National Health Service Bill which will ultimately follow; but I welcome the Green Paper inasmuch as it represents an important step forward.

6.40 p.m.

Mr. Kenneth Lomas: It is with great pleasure that I follow the right hon. Gentleman the Member for Reigate (Sir J. Vaughan-Morgan), who has made a very thoughtful and interesting contribution to the debate. My pleasure is redoubled because, not many months ago, we followed each other around the South Pacific area when we had the opportunity to look at hospitals in Samoa, Fiji and Tonga. Thank goodness, Tonga is having a brand new hospital built from British funds. When the right hon. Gentleman and I saw the conditions in which the hospital staff had to work there, we both agreed, I think, that we have here in Britain working conditions and a Health Service of which we can be rightly proud.
What we want to do, however, is to make this public service even better. Many hon. Members have emphasised the size of the problem and the right hon. Gentleman was quite right in pointing out that here is very big business indeed. The Health Service employs 750,000 people and the central Government make a contribution of about £1,500 million a year, which is a great deal of money. The Green Paper rightly points out that this sum is nearly as large as the present total yield of rates and is about three-quarters of the total amount of the present Government grants to local authorities. It is, therefore, right that there should be a long and searching look at the structure of a service which was created almost 25 years ago.
It is also right that we should have had two Green Papers. The hon. Member for Hertford (Lord Balniel) seemed rather worried that this second Green Paper is different from the first, but that was the whole purpose of the first Green Paper. It is right that there should be a certain amount of wooliness, because that arises from the fact that the Government have sought opinions and views from all quarters so that the White Paper, when it comes, can be properly put together.
The time has surely come when we all agree that the tripartite system should be ended. This is the system whereby hospital and specialist services are provided through the regional hospital boards, boards of governors and hospital management committees, while the family doctor

service and the general dental, ophthalmic and pharmaceutical services are provided through executive councils, with the local authorities left to deal among other issues with such matters as maternity care, child care, midwifery, home nursing, health visitors, health centres, home helps, ambulances, mental health social workers, after-care, chiropody and general health education. The time has come in the interests of all concerned to have a much more streamlined structure in which the different branches are controlled by the same authority and the separate services are integrated at local level.
I endorse everything said by my hon. Friend the Member for Willesden, West (Mr. Pavitt) and by the right hon. Gentleman concerning the omission of an occupational health service. I believe that the working environment of 24 million people in employment is a vital factor in determining the standard of personal health and that any consideration of an environmental service which does not include industrial health is totally unrealistic. I appreciate that much is done in this Green Paper and more is contemplated through the Department of Employment and Productivity, but, in spite of what is being done by that Department, an occupational health service should come within the structure of the Health Service as such and should be the responsibility of the Secretary of State for the Social Services.
If for no other reason, this idea should appeal to both sides of the House, inasmuch as the T.U.C., the C.B.I. and the B.M.A. are all in favour of such a scheme. I should declare my interest in that I am a sponsored member of the National Union of Public Employees, which enrols a lot of its members in the health services, both in the ancillary grades and in the higher professions, nurses included. The union accepts the broad outline of this Green Paper as being logical and right.
The union and I have considerable reservations, however, about the proposed membership of the area health authorities. I favour the creation of such authorities. I am particularly glad that the number proposed is being substantially increased and that they will serve the same areas for which the proposed new


local authorities are to provide the personal social services.
However, although the proposals in the Green Paper are an improvement on the present situation and represent a step in the direction of making the Health Service more representative, it is, in my opinion, a somewhat shuffling step. Both the trade union movement and I were expecting something better. The Government propose that an area health authority should consist of one-third members nominated by the health professions, one-third by local authorities and one-third appointed by the Secretary of State, with a total membership of about 20 to 25.
By what kind of logic should industrial democracy, or, if one wishes to call it so, workers' or employees' participation be suddenly cut off at the professions? I cannot understand this. Both my union and others want to see a bigger say for all workers, whether they happen to wear white coats or blue overalls. This is something we should try to put right in the White Paper to be issued later. The right to appoint representatives to the area health authorities should be granted to all sections of those employed in the health services, and one way to secure fair representation would be to make a provision for each Whitley Council to appoint a member. It could be left to the unions concerned to decide which member it should be and from which union, but it would ensure that ancillary staff and others were represented on the area health authorities.
I accept everything that the right hon. Gentleman said about the Whitley Council machinery. It is creaking and does need overhauling and I hope that that will be done before long. But we need to have representation on these area health authorities from people below the professions, representing the great mass of ancillary workers in the health services. If we did that, we would at least be paying tribute to their skills and to the work they do, which ensures that the Health Service does not collapse.
If we on this side of the House, in particular, wish to see the extension of industrial democracy—we have talked about it many times—there is no better place to start than in the public sector, because it gives the opportunity to put into effect the kind of things we have

been arguing about as a movement and as a party for a long time. There is no point in talking about extending worker participation, industrial democracy and consultation unless the Government, through the public sector, give a lead.
For example, it should be made mandatory on each hospital to set up proper and effective joint consultative machinery in which all sections of those employed in the Health Service are included. This is permissive; at the moment a joint consultative committee can be created, but little attention is paid to it, and it falls into disrepute. This would be one way to make industrial democracy come alive in the public sector. There is provision in the hospital service for joint consultation, as distinct from negotiation. but there has been little evidence of positive developments since the creation of the health service.
A major factor has been the lack of interest displayed by most hospital authorities in joint consultations as a method of improving the standard of the service through employee participation. I therefore hope that something will be done on these lines, and that there will be established joint consultative machinery with nominees of all grades up to and including at least the area health authorities.
In Chapter 8 of the Green Paper, paragraph 100 says:
It will be necessary to ensure that the skill and experience of existing staff are used to full advantage in the new structure.
Paragraph 105 says:
For an integrated service, the training of staff assumes an added importance. The need for developing postgraduate medical education has already been mentioned. Of no less Importance is the need to extend the education and training facilities available to all other staff throughout the health service.
I stress the last sentence. In a service which covers as wide a range of skills and occupational groups as the Health Service, there is a danger that the education provisions will become concentrated on the professional and closely related groups. Sometimes the training needs of ancillary staffs and others have been overlooked. The importance of extending training facilities is recognised in the Government's plan to set up a national training body, but my union, amongst others, feels that the only national body that could command adequate financial and


other resources and cover the widest range is an industrial training board.
We argue, with justification, that it is time that the health service was subject to the same obligations for providing adequate standardisation of training to all groups of staff as are most large industrial and commercial undertakings. This would take us one step nearer to giving the people at the bottom end of the scale in the health service the chance of being trained for the job which is daily becoming increasingly skilled.
In spite of these few criticisms, I welcome and endorse the Green Paper. It is an imaginative, far-reaching document which seeks to lay down the pattern for the Health Service for the next decade or more, and the Government are to be congratulated on bringing forward these proposals. If the Government would only consider including some of the suggestions which I have made, I would be prepared to give even higher commendation to the White Paper when we come to discuss it.
It might well be argued that there is a first-class case for an economic development committee for the Health Service, similar to that currently being discussed for local government. This would enable us to meet the challenge of the future within the context of national economic and social objectives, and I hope that consideration will be given to the suggestion.
We can be proud of the Health Service. It has stood the test of time for 22 years, but it need redifining, restructuring and reforming. We now have the opportunity to make democracy work within the Service. If we do not take this opportunity now, we shall have to wait 10, 15, or 20 years before another opportunity occurs. We now have a Labour Government, as we had in 1946, when the scheme was born. I think that it would be the consensus of opinion that the Opposition were the unwilling midwives of the Health Service, if nothing else, without going into the details of how they voted. We want to make the service work more efficiently for everyone. I am sure that both sides join with me in congratulating the three-quarters of a million people who work unceasingly and so devotedly in making the service a success and of value to

those who use it—and I hope that the Green Paper will point the way to the creation of a better and more democratic service.

6.56 p.m.

Dr. M. P. Winstanley: It is interesting to note that the hon. Member for Huddersfield, West (Mr. Lomas) ended his speech, as have so many hon. Members, with a fine burst of ecumenicalism. Whatever party differences there may have been in the past, all ships now seem to be steaming towards the success of the Health Service. I welcome that and I have no wish to rake over old controversial ground. The hon. Member for Huddersfield, West, will not be surprised to hear that he has my full support in anything which he and his colleagues do to secure greater worker participation at all levels in the service. He is right to stress that the composition of the boards will be a crucial matter in relation to their prospects of success.
I welcome the Green Paper system as a whole. Had we not moved towards this system, the first document for consideration might have been the White Paper and this might have been bulldozed through before we knew where we were. We have seen the conspicuous advantages of discussion throughout the country among people who are genuinely interested in the subject and whose opinions have already made themselves felt in the second Green Paper. It may be that we shall see a third one with other changes.
I welcome the procedure in general. Perhaps it would not be out of order to say, in passing, that we might have saved ourselves a lot of trouble if we had had Green Papers on other subjects, for example, had there been a Green Paper on selective employment tax, it would surely have emerged in a very different form. I agree with hon. Members who have said that the second Green Paper is a great improvement on the first. The proposals represent a step in the right direction, but I do not regard them as the final answer. We must move a lot further before we achieve a wholly satisfactory system of administration within the Health Service.
May I emphasise something which may be overlooked. The efficiency of the service depends not merely on administration, but on four vital factors: first, the


number and quality of the people who do the work; secondly, the adequacy of the premises in which they work—the hospitals, clinics, doctors' surgeries, and so on; thirdly, the adequacy of the tools with which they work—the drugs, X-ray machines, kidney machines and all the equipment which is used; and, fourthly, the administration by which these three factors are brought together. We must all accept that there are deficiencies in these three respects which cannot be made good by administrative manoeuvring within the limitations of the present shortages. We need more doctors, nurses, radiographers and people at every level. There is still room for improvement in hospitals, doctors' surgeries and other premises. We also need more and better equipment.
Bearing this in mind, let us not expect administrative rearrangements to produce all the answers but such rearrangements are vitally necessary to ensure that we make the best possible use of the resources we have. There is no doubt that the tripartite system of organising the Service in three watertight compartments results in waste and duplication, and often in the wrong assessment of priorities.
Little has been said about the origin of the tripartite structure. We have it largely because we had it to start with. At the beginning of the discussions about the Service from 1944 to 1946, leading up to the passing of the Act not all the questions were asked, so that not all the necessary answers could be given. There was the mere assumption that we must provide a comprehensive Health Service; and that it would be provided by those already providing services. We thus perpetuated all the bodies that were then in existence each providing different and in many ways separate services.
I cannot accept the argument of the hon. Member for Manchester, Exchange (Mr. Will Griffiths) that the then Minister of Health, Aneurin Bevan,, was forced into accepting that system to avoid antagonising doctors and other members of the medical profession. I regret that he made that contention, because I otherwise largely agreed with his speech. He referred to what he called "the professional dislike of the whole concept of the National Health Service." I do not deny that some members of the medical

profession disliked the concept, but many others had been campaigning actively for years for a comprehensive Health Service.
Even the British Medical Association, which I do not regard as being in the forefront of the avant garde of the medical movement, recognised the need long before the passing of the Act. Indeed, in 1942 the B.M.A. passed a resolution accepting that it was no longer possible for the financial burden of ill health to be borne by the individual and that it should be spread throughout the community on an insurance or taxation basis, and for that reason set up a body called the British Medical Planning Commission, which was charged with the task of studying and reporting on methods of organising a comprehensive Health Service for the nation.
Constant repetition of the idea that the Service was forced through against bitter opposition from the medical profession is uncalled for and untrue. The majority of the profession favoured a Health Service. There may have been arguments about what sort of service it should be—whenever two doctors get together they will argue; if more than two get together there will be more than two arguments—but, on the whole, the profession was in favour of a Health Service.
The hon. Member for Manchester, Exchange, spoke, as he often does, about abuses of the service by private patients and about queue jumping. Doctors are still in favour of the service and the majority of them are trying to make it work. While I appreciate the hon. Gentleman's motives—he has worked hard in this sphere and has done an excellent pob in my own area—he would agree that the vast majority of doctors do not indulge in manipulating waiting lists to provide for queue jumping. Indeed, they do everything possible to keep the service running smoothly and fairly.
Of course, wherever there is a queue there will be queue jumping. In most hospitals, patients are taken from waiting lists on the basis of clinical necessity. If it is necessary, clinically, to move a patient up the list, that is done; but whenever that is done there is bound to be talk of an under-the-counter transaction taking place. Queue jumping may occur from time to time, but it is wrong to


perpetuate the idea that it is going on continuously. Naturally, the only real way to get rid of accusations of queue jumping is to get rid of queues.
I referred to the Planning Commission set up by the B.M.A. in the early 'forties. That is of some relevance to the debate because it was to that body that I put the idea of organising a Health Service under health boards. That was in 1944, and, later, I campaigned for a move along those lines, as many hon. Members will know.
We should remember that the proposals in the Porritt Report of 1962 were useful, but merely brought together the hospital and local authority services and left the G.P. and domiciliary services completely outside. The Liberal Party health committee, of which I was a member under the distinguished and able chairmanship of the Hon. Mrs. Gaynor Heathcoat Amory, recommended in its report a system of area health boards which went much further than that envisaged in the Green Paper.
In this report under "Administration", the health committee stated:
The Committee began their work with no preconceived ideas on administration, but in every field found themselves up against the Tripartite (General Practitioner/ Local Authority/Hospital) divisions, as the cause of duplication, waste, and harmful isolation of people working in each of these branches".
The report went on to make a point that has not been made in this debate
In particular, the actual disincentive to Local Authorities to provide Welfare Services, at a much lower cost to the community than Hospital beds, has led to undue pressure on hospitals, and a waste of money and the time of skilled personnel.
The report went on:
It is a tribute to the keenness of many Medical Officers of Health and of Local Authorities, that so much has been done in spite of, rather than aided by, the existing system
and concluded that
…only a radical change in the present system would ensure that money is spent where it is most useful and most needed".
Later, the report, which was sent to the then Minister, recommended in detail a system of area health boards far in advance of that envisaged here, designed primarily to avoid waste and duplication.
Why does this arise under the present system? It might help if I gave some examples. First, consider the maternity

services. Under the present system an expectant mother who decides to have her baby at home will receive attention from a variety of doctors and midwives from a number of different sources who are seldom in close contact with each other.
For example, she may have to attend her G.P. for prescriptions from time to time. He is employed by the executive council. She will be attending the local authority antenatal clinic, where she will be seen by another doctor who is employed not by the executive council, but by the local health authority.
A difficulty may arise and the expectant mother may have to go to hospital for a consultant's opinion. She will there be seen by another doctor and another midwife, who are employed not by the executive council or the local health authority, but by the regional hospital board. On it goes. She will be visited from time to time by a midwife, who is employed by the local health authority. That midwife will be expecting to deliver her baby. However, something may go wrong at the confinement. Her G.P. may then send her to hospital to have the baby, where she will be delivered by yet another midwife, who may not have set eyes on her before. One has this duplication of services with no real contact between people.
The Minister will remember that the Annis Gillie Committee on the future of general practice commented at some length on this difficult problem of the separation of people who should be working together but stated that we should allow this functional unification to take place and that the structural unification would follow it. I said at the time—and I believe that events have proved me right—that it was the structure which was preventing the unification and that unless we reformed the structure it was no good expecting that people would come together automatically.
The same thing applies to the separation of the school medical service, which is something which is not mentioned in the Green Paper. The school medical service was set up at a time when there was a financial barrier between many children and the doctor. But things have changed. One now finds the school doctor, who is doing his best and the general practitioner, who is also doing his best, seeing the same patients without any


effective contact between the two. A mother may bring a child to see the G.P. Perhaps I am that G.P. I shall look at the condition of the child and say what I think that child is suffering from. The mother may then go to the school doctor, who may give a different diagnosis. This situation is not helpful to me, to him or to the patient.
What I am suggesting is that both these people could be of immense help to each other if they were brought together in a functional way in an integrated scheme. But they cannot he integrated until we have some kind of structure of this kind. I should like to hear the Minister's comments on his proposals for these other health services which are still apparently to exist under other Ministries outside the general umbrella of the Health Service.
The point was made clearly in the interim report of the Liberal Party health committee about the disincentive as regards local authorities. This has been mentioned by a number of hon. Members. It is well illustrated in relation to the costs of hospital beds for geriatric patients. The figures for providing geriatric beds for old people will vary. Broadly speaking, it costs about £40—certainly more than £30—to house an elderly person in a general hospital bed, and more than that in a teaching hospital, whereas an enlightened and forward-looking local authority, by providing proper home care and perhaps old people's accommodation with wardens and with proper use of ancillary services such as home helps, meals on wheels and soiled linen services, can effectively provide care of the same standard, or perhaps a much more acceptable standard from the patient's point of view.
This care can be provided at a cost much lower than that required to provide it in a hospital—perhaps as low as £10 or £12 a week. But there is no provision for a transfer of finance. It is a net saving to the community of perhaps £20 a week per case but it is not a net saving to the local authority which has to provide £10 a week for each place it provides, but a net loss. There is no provision for transfer of money from the regional hospital board which is being saved expense to the local authority which is incurring it. Because of the continued existence of that disincentive, we have found that

in many cases our health services have not developed on the right lines.
At the outset the Secretary of State said that it was his aim to secure the maximum decentralisation of the Health Service consistent with the needs of national policy. I absolutely agree with him there. The noble Lord the Member for Hertford (Lord Balniel) said something rather similar—that the true rôle of the Ministry was general policy-making. It has always been the view of my right hon. and hon. Friends that the business of central Government is to lay down in any field the broad lines of national policy. We believe that within these broad lines there is room for considerable variation on regional lines according to special regional needs or regional wishes.
Nowhere is this more clearly illustrated than in health. I believe it is right that the central Government should lay down that we should have a comprehensive health service, and I hope that it will be a health service not paid for at the time of need. But these are policy decisions to be taken by the central Government. But the form of the Health Service could vary very much. Let us take, for example, the need for maternity beds as against home confinement. This is not just a matter of clinical necessity to an area. It may be a matter of wish in an area. East Anglia has a low rate of hospital confinements, not because of a small number of maternity beds but because people in East Angia elect, more often than others, to have home confinements. If an area such as that wishes, therefore, to provide more in the way of emergency services, such as district midwives, home helps and other kinds of flying squad services, which might be necessary to deal with emergencies, rather than to increase the number of maternity beds, it seems an ideal thing for areas of that kind to be able to do. But they have never been able to do it because we have never had that kind of structure. We have had a local health authority structure covering a patchwork of local authorities throughout the country, big ones and small ones, and not covering an area in that way.
I could go on with other examples but I think that the Minister takes the point. There ought to be some kind of an organisation—an area health board


—which ought to be able to run its own services according to its special regional needs and wishes. There are regional differences in climate, geography, occupation and social status which have a known effect on health, and they ought to affect the way in which areas run their services.
I judge this Green Paper largely on the way it achieves that, and from that point of view it does not go anything like far enough. I should like to see more said about financial autonomy for the health boards. I should like to see the boards cover bigger rather than smaller areas. I should like to see regional area health boards with lower tiers carrying out certain personal services but the regional area health boards providing all services such as hospital, domiciliary, preventive and public health in their region.
I should like to see those regional health boards have a direct and total control over their finance. Here I take up a point raised by the right hon. Member for Thirsk and Malton (Mr. Turton) and by other hon. Members. The right hon. Gentleman said he hoped that the health boards would have an opportunity to raise their own money. We must remind ourselves of what happens in local government. Those areas which need most money will raise least and those which need least money will tend to raise the most. Undoubtedly it is the areas in which the social status is lower and the quality of life is lower which raise less money and need most spent on health. Therefore, most of the money must, clearly, come from central funds. It ought to be assessed as an area's share of central funds. Areas should have the money almost as a right with variations to meet known regional variations which might have an effect on them. Then, having had that, within the broad lines of national policy the regional area health board ought to be able to carry out its own programme.
I should like to see an experiment instituted on these lines, and I see no reason why it should not proceed. We should start here and now and not have a blueprint for the whole country. It would be easy to take an individual area, to amalgamate the executive councils, fitting these from a number of local authority areas into a large unit, and adapting

the regional hospital board area to the same areas making them conterminate with the other area. A pilot scheme on these lines could be instituted, so that an area could run its affairs in its own way, within the safeguards laid down. I am sure that we should learn a lot. I hope that we shall not proceed too far in laying down a firm structure which must be applied everywhere because it looks nice and tidy before we have had an opportunity to look at it actually functioning.
Apart from the questions of finance and the size of the board, I have one or two other minor anxieties. As I say, I should like the board to be bigger, I should like it to have more autonomy, and autonomy over its own finance in particular. But I am greatly disturbed also by the present proposal to divide responsibility for welfare from responsibility for health. I cannot see how that can be done. Hon. Members on both sides have talked a lot about the general practitioner as the keystone of the service, and so on. I have heard that sort of thing for years. For all the 18 years I was in general practice, I was called a keystone, but nobody did much about it, except to tell me what a fine chap I was and what a good keystone of the service I was.
If we are to do what so many hon. Members seem to want to do—that is, make the general practitioner the leader of a welfare team at the head of all the various services which are necessary to a family—the welfare services must be brought fairly and squarely under the area health boards. I do not say that we must take everything away from the local authorities. I should like to see the local authorities carry on supplying these services as agents of the area health board, so that, in deciding to do certain things, a local authority would not automatically be faced with the necessity of putting up the rates. It would know that, out of this part of the national funds going to services for health the area board would be able to pay the local authority for providing certain services as an agent under it, so to speak.
I look with anxiety at the division between welfare and health. Mental welfare in particular, should be brought under the umbrella of the area health


authorities, as should the home help service, which also is crucial to the situation covered by the general practitioner.
I am anxious, also, about the time gap between implementation of the proposals in the Seebohm Report and the Maud report. While these two are, apparently, integrated in the proposals which the Government are putting forward, there will be a long gap in the middle when no one will be quite sure what is to happen. I hope that the Minister will be able to comment on that.
I have spoken for longer than I intended, but this is a subject in which I have a profound interest. I believe that I was the first person seriously to put forward publicly a proposal for the administration of the Health Service for Britain under area health boards. My party was the first party to put forward such a proposal. We have stuck to it. We still stick to it. We welcome the proposals put before us today in so far as they provide the right kind of foundation from which we can move on. But I hope that no one will assume that merely by adopting these particular proposals we shall have done more than take a step in the right direction.

7.24 p.m.

Mr. Denis Coe: I am glad to follow the hon. Member for Cheadle (Dr. Winstanley), who, with his medical knowledge, always gives us the benefit of a great deal of experience in debates of this kind.
The hon. Gentleman spoke of the waste which occurs under the present tripartite system, and he spoke also of the problems which parents face when they take their children to school medical officers and other medical men in an effort to find out what is wrong. If I may say so, that highlights the fifth benefit which my right hon. Friend stated as stemming from the Green Paper, that it would mean in future that there would be full knowledge of the problems of the patient among all who treated him. In my view, this is the core of the Green Paper, the fact that, at long last, all those connected with the treatment of the individual, the patient who is the central beneficiary of the National Health Service, will be integrated in a way which is not possible at the moment. This is the heart of the

matter, and that is why I welcome the Green Paper. Hon. Members on both sides agree that progress is essential in this respect, there must be an end of the tripartite system, and we must have an integrated scheme.
When we speak of knowledge of all the problems of patients being known by all concerned, we have three different aspects in mind: those who work in the service, the money associated with the service, and the structural organisation of the service. I shall confine myself mainly to the question of structure, though I join with other hon. Members in paying tribute not only to the professionals who work in the National Health Service but also to the many voluntary workers in the various organisations—the hospital management committees, the regional hospital boards, and so on—who have contributed so much over the past 20 years. In suggesting changes in the structure, we must be careful not to dissuade or upset people who have voluntarily given great service in the past. We wish to retain and harness as much of it as we can.
On the question of money I thought it unfortunate that the noble Lord the Member for Hertford (Lord Balniel)—I am glad that he is back in his place—complained, in spite of the excellentrecord of money spent by this Government on the Health Service, that more should be spent. Of course, more should be spent. But Front Bench spokesmen opposite must not say in the House that the Government should spend more on this social service or that, and then on the hustings demand that Government expenditure must be cut. They ought to make an honest assessment. Arguments of that kind will not do.
I come now to the question of organisation, which, in my view, is most important. We can consider this Green Paper only in relation to the structural organisations which the Government have put forward for local government and the structural changes which they have proposed for the local authority social services in the Bill now before the House. The Opposition Front Bench ran away from this problem. When I intervened in his speech, the noble Lord twitted me for not being present at the debate on the White Paper on local government


reform. In fact, I was here the whole time, I took part in it, and I questioned his hon. Friend who led from the Front Bench. At no time did I hear a clear indication of the level of local government organisation in which the Opposition are interested. Yet this is crucial. If the noble Lord says that they do not like unitary authorities and do not believe in them, and yet they would make their area health authorities conterminous with local authority boundaries, we can only judge their belief in area authorities if we know how big they would be. Are we talking about 100 area authorities or 200? We have had not indication today. I hope that the hon. Gentleman who is to wind up for the Opposition will give us a little more information on this crucial question.
There has been a good deal of agreement across the Floor that the area authorities must have important functions to carry out. If that be so, they must be fairly large. The hon. Member for Cheadle would like them to be even larger. But, whether we say 90, 100 or 50, we are talking about fairly large administrative units. The best that I can judge from what the Opposition have said regarding their local government proposals is that their area authorities, if they are to be conterminous with local authority boundaries, will be much smaller. I hope that we shall have clarification on that tonight.
I think that we all agree regarding unification, and I take it that most hon. Members will agree with my right hon. Friend that the health service cannot be run by the local authorities. I realise that there is an exception in the person of my hon. Friend the Member for Manchester, Exchange (Mr. Will Griffiths), who wants to see more discussion on this point, but I feel that the arguments in terms of cost and the sort of services involved rule out the local authorities from doing the job. After the reform of local government, we shall be giving the 90 or so local authorities which remain an enormous amount of work to do, and I cannot see them also conducting this massive health service in addition.
That brings me to one of my worries about the actual structure of the area authorities. The Green Paper suggests that a third of the membership should come from the local authorities. I am

concerned where we will find the councillors not only to run very large local authorities with important powers—these local authorities are to have a maximum of 75 members part time—but also to help to run the area health authorities. These proposals suggest at least seven councillors, but my hon. Friend the Member for Willesden, West (Mr. Pavitt) would take as many as 13. I believe there will be a manpower problem because of the hours which part-time voluntary people may be able to give to these tasks. I do not pretend to know the answer. I am in favour of this suggestion, but there is a genuine problem to which I do not know the answer.

Mr. Tim Fortescue: Paragraph 25 of the Green Paper states that
area health authorities should consist of one third of members appointed by the … local authorities".
It says not that they should be members of local authorities, but that they should be appointed by the local authorities. Does the hon. Gentleman agree that, therefore, they could come from outside the local authorities?

Mr. Coe: If that is the case, it makes life much easier. I should think, however, that the general consensus was that if we wanted to retain an elected element then most of them should come from the authorities. I am not sure whether my right hon. Friend was not thinking that they all should.

Mr. Crossman: He was.

Mr. Coe: That solves the problem. I should want to retain the elected element. However, we must face this problem.
In general, I accept that the area health authorities should be large authorities numbering 90 or so over the country and that they should have a real feeling of participating in the Health Service.

Mr. Will Griffiths: Before my hon. Friend leaves the point about the time that people will have to serve on bodies like area health authorities, may I ask whether he agrees that, whether they come from the local authorities or whether we continue the system of appointment, the call upon people giving voluntary service, because that is what it is, will be the same?

Mr. Coe: If we give the area health authorities all that is envisaged in the Green Paper we shall be giving them a big job to do. Therefore, we must be careful about their membership. We must recognise the problems which people will have to face if, on top of that, they are also to serve on large councils with large powers, including services like education, which could be a full-time job.

Mr. Will Griffiths: I understand that. But the Minister will appoint one third as his nominees, and he will presumably appoint people who have the time. That must mean an exclusive and rather narrow sphere from which to choose. My right hon. Friend frowns. In fact, if he is to appoint one third, and if my hon. Friend the Member for Middleton and Prestwich (Mr. Coe) is right about the limited time available to people on local authorities, the implication is that the Minister will make his appointments from people who have time, which often means wealthy people and full-time appointed trade union officials.

Mr. Crossman: I accept what my hon. Friend said. But if an individual has to do full-time work as a local government representative and as a health council representative, the two duties together can be heavy. It is unlikely that I should select local councillors. I should seek to select people who would make the Health Service their main contribution to public service, not a secondary one.

Mr. Coe: I have at least raised a hare or a discussion point. I will leave it at that before my hon. Friend the Member for Manchester, Exchange tackles me again.
I have a certain sense of unease about the regional health councils. I am prepared to agree to a certain extent with the hon. Member for Hertford. which makes a change. In the debate on local government reform I pointed out that, although unitary authorities were a concept with which I could agree, there were certain services over which there ought to be another tier. That is why I was anxious in that debate to put forward the view that regional authorities should be properly elected with a definite job to do. I appreciate that this matter cannot be resolved until the Crowther Commission has reported. I will not say more

about that, because I should be out of order.
However, it seems true in the health sphere, too. Therefore, the kind of jobs about which my right hon. Friend talked as being advisory tasks for a regional health board should not be advisory, but jobs specifically given to them to do. I should like to hear something about that when the Under-Secretary winds up.
I was pleased to hear by right hon. Friend, in answer to a point made by the right hon. Member for Reigate (Sir J. Vaughan-Morgan), say that district committees would have statutory duties. I am sure that this will enhance their chances of doing a useful job at district level—indeed, of acting as a kind of focal point for the health matters of that district. If there are doubts about how it will work in terms of participation, I wonder whether my right hon. Friend will consider referring this point to the body which is to be set up to look at the whole question of participation at local government level. I think that there is a tie-up here which is worth looking into.
On central control, I noticed that my right hon. Friend referred to The Times article. The New Statesman also suggested that he would be taking an enormous amount of power and that he would run the Health Service. I was glad to hear the points that my right hon. Friend put forward this afternoon about devolution, in particular, to the area health authorities and to the district committees. But I reiterate the point that I made earlier—namely, if we are to have proper independence for these area health authorities they must be of a reasonable size. Therefore, it is important that the Opposition recognise this fact and come up with a figure.
Concerning staffing, I agree with my hon. Friend the Member for Huddersfield, West (Mr. Lomas) about wanting worker participation not just at the professional level on the area health authorities, but also, as it were, in the industry. I fully support this suggestion. I hope that my right hon. Friend will take this matter into account.
I am also concerned about the community physician, who has not yet been mentioned. This is a crucial appointment. I hope that thought will be given to this point.
Training is absolutely essential. Recently, I met social workers who stressed to me the vital necessity of training and the opportunties for promotion being as wide as possible. This is also important in the National Health Service, and I am glad that the Green Paper pays attention to it.
I congratulate my right hon. Friend, on the way in which he has left himself open to representations over the last few months which has resulted in this improved Green Paper. He is to be congratulated on the care with which he has listened to representations from a wide sphere. The result is a Green Paper which, as my right hon. Friend said, will lay the foundation for the next stage of the Health Service, of which I hope all right hon. and hon. Members in this House can be proud.

7.40 p.m.

Mr. Marcus Worsley: I am glad to follow the hon. Member for Middleton and Prestwich (Mr. Coe), who has made such a thoughtful contribution to the debate. I think that he is right that we are all agreed about unification. Although little has been said about it, the document that did more to persuade people of this fact that anything else was the Porritt Report. It is a little strange that the first Green Paper which followed so many of the Porritt recommendations made no comment to that effect.
There is indeed agreement about unification and we are a unified House. We have had very little mention of that hoary old chestnut about the Tories voting against the 1946 Act. As everybody knows, the proposition for a unified Health Service was put forward by a coalition Government, and in regard to the reasoned Amendments the Conservative Party both on Second and Third Readings stressed the principle of a comprehensive Health Service.
If we look at the wording of those reasoned Amendments in terms of today's debate, we find some justification for them. The Health Service as set up in 1948 was not perfect. If it were, we would not be taking part in this debate today. There was wisdom in some of the points made by my predecessors on these benches in those reasoned Amendments. However, that is enough about

that matter, since we are now talking as a unified House of Commons.
There is general agreement for this idea, but less agreement—and this is the nub of the matter—to what extent that unified service should be locally or centrally directed. In the end, we shall have to decide whether we want a community Health Service or a National Health Service. They are not the same thing. At the moment, the hospital service is highly centralised. That fact leads to some sort of uniformity of standard, but at tremendous cost in terms of local independence and local initiative.
Like my hon. Friend the Member for Hertford (Lord Balniel), I have served on a hospital management committee. It was a traumatic experience, rather like being the middle goods wagon in a goods train. Decisions were shunted backwards and forwards, but rarely could the hospital management committee make a decision and say, "This is our decision and it will be carried out." Yet the smallest unit in local government can take such a decision and does so all the time.
My fear is that this awful pattern will be repeated in a unified Health Service. I believe that the Government's proposals in the Green Paper will lead to even more power being given to London partly because the regions are to be much weakened. The Green Paper represents an absolute increase in the powers of the central Government. I realise that the Secretary of State does not intend this; he has said so, and I accept what he says. But I believe that he is wrong in the implications of what he is suggesting. The sort of set-up he suggests will be highly centralised. The fact that there will be 90 primary authorities instead of 14 regions as at present is bound to mean greater centralisation in London. This is what concerns me. A unified Health Service would Include the community health services which are now firmly in local government. If those community services are to be effective they must be closely linked with the community.
I accept that common boundaries will help a good deal, and some nomination from local authorities is also a big step forward. But I wonder whether we have yet gone far enough. Do we need the Minister's third? There is in the Green Paper no serious argument about the


use of this third. Are they to be nominees to see that local people do what central Government want? The fact is that the central Government, under the proposed plan, will have complete financial control——

Mr. Crossman: It has now.

Mr. Worsley: It has now, as the right hon. Gentleman says.
There is no difference, except that if one takes out the central tier, which has considerable autonomy in terms of planning, and so on, then, instead of having the 14 authorities to which one is delegating, one will have 90. Applying the principle of divide-and-rule, this means that more power will be concentrated in the centre.
I wonder about the Minister's third, and I should like to hear very much more justification for it. I am attracted to a half-and-half system to give this real link with the community. I hope that such a link will include people chosen by local authorities who are not councillors. On the one hand, there should be community representation on the other hand, there should be the health professions in the interests of clinical independence.
I believe that the professions are being over-sensitive on this issue. There is nobody in central or local government who does not understand and accept the necessity for clinical independence, and nobody who wishes in any way to remove it. It is difficult to know why doctors alone should be so sensitive about this notion of independence whereas people in other professions, such as social workers, take it for granted that they can operate in a local authority with clinical independence. There have always been doctors within local government in the shape of the medical officers of health. I have never heard them complain about their clinical independence being questioned.

Dr. Winstanley: Perhaps I may assist the hon. Gentleman, since I worked for four years in a municipal hospital. Our fear was not about too much clinical control, but about financial control. The profession knows that local authorities are always rather short of money. Therefore, the profession has the fear that if

it is once put under a local authority then there will be that kind of control. I assure the hon. Gentleman that that fear has been very much more a fear of control as a result of shortage of funds rather than interference in a clinical sense.

Mr. Worsley: I believe doctors are over-optimistic if they feel that they will get over the shortage of funds by coming under central rather than local government. But I take the hon. Gentleman's point.
I do not see how proper co-ordination between the Health Service and the social services is to be achieved unless the two are much more on a par than is envisaged in the Green Paper and in the Local Authority Social Services Bill. Nor do I see, and this is a more difficult problem, how there could be a proper allocation of resources between health and welfare. If the health side is to be intensely centralised, with the whole financial control and ultimate decision-making in the hands of the Secretary of State and the other side, the welfare and social services, are to be a function of local government, I do not see how the decision about priorities is to be taken. Hon. Members in speech after speech in this debate have mentioned this matter. The Secretary of State mentioned South Ockenden and my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) talked about scattered rural areas.
How are we to decide the best priority between a hostel which, under this scheme, will be provided by local government, and a hospital, which will be provided by the central Government? This is a problem that the two schemes—the Seebohm scheme and the Green Paper scheme—do not solve. I do not see how we can make these decisions, or that anything is these proposals makes it easier to take them than is the case at the moment.
What about the social workers in the Service? I find the wording in paragraphs 45 and 46 of the Green Paper extremely confusing. Is it the intention that as from the setting up of the social service committees and departments in local authority, social workers in hospitals should be taken on by those committees or, alternatively, that no change


should be made until the area health authorities are set up? That is a question to which the social workers involved will hope for an answer. An answer must be given, because when we set up social service departments under local authorities we shall soon find that the pull of that service—because of the career structure and the greater number of people in it—will make it more and more difficult to recruit social service workers outside the departments.

Mr. Crossman: The answer is that no change will take place until the creation of the health authorities. I do not deny the second point made by the hon. Member, namely, that the establishment of the new centralised personal services will be an attraction for social workers. In the long run, all social workers would presumably be local authority employees, if necessary seconded to hospitals. They would be seconded for use in hospitals just as persons could be seconded to group practices or health centres.

Mr. Worsley: One of the right hon. Gentleman's attractions is that we usually get answers very quickly from him. [Interruption.] I agree that they are not always right. I am not sure that the Minister is right in this case. I do not see the logic of waiting until the area health authorities are set up before making this change. I ask the Minister to think about this. Once we have set up these unified social work departments in local authorities there is a great deal to be said for bringing all hospital social workers within its orbit straight away, as suggested. But that is a minor point, and I do not wish to give the impression that I do anything but support the general concepts of the Green Paper.

7.53 p.m.

Dr. Shirley Summerskill: The Green Paper has been welcomed by more people, for more reasons, than was the last one. Therefore, the House can accept it on that basis. It would be difficult to publish any Green Paper in which everything was agreed by all the interested parties, but in this case even the British Medical Association produced only rumblings, rather than an explosion, and for that we must be grateful.
The National Health Service is still one of my party's proudest achievements,

but after 22 years the time has come to streamline and modernise it, otherwise it would be the target of criticism for everybody who never really wanted it in the first place and would like to return to private practice. The majority of patients and staff in hospitals would not like to go back to pre-Health Service days, and I believe that also that goes for the majority of general practitioners.
The service is the envy of people who come here from abroad and also of British people who go abroad and discover the conditions under which sick people in other countries are treated. We do not pay the fantastic prices that have to be paid abroad, and Britain has the highest standard of medical care in the world. In all their speeches, members of the Conservative Party adopt an attitude of reluctant tolerance to the service. They are never carried away by it; on the other hand, they are anxious not to dissociate themselves from its inception, as we have heard tonight. They did not agree with it, but they did not disagree with it.
The general practitioner is the backbone of the service. But he still wants to be an independent contractor. That is fair. He wants independence vis-à-vis his own patient, in deciding how to treat him and when to see him. At the same time, he wants more liaison with local authorities and hospital services. That is particularly the case with the younger doctors. The older doctors are used to single-handed practice and probably could not adapt to anything else, but the young people coming in accept and welcome the idea of group practices and health centres.
Even my constituency, which boasts of a brand new unit for geriatric cases, a brand new psychiatric unit and a brand new welfare clinic, is still only planning the first health centre. Building will begin this year. It was very slow to accept the whole idea of a health centre. The Government have done a great deal towards the building of these centres. In 1964, there were only 20. Today, there are 93 in operation, 69 being built, 64 approved for building and 100 in the course of planning. We have made great strides with this new life for the general practitioner.
At the same time, the Government have improved the conditions of work of the family doctor. They have improved his


morale. He no longer feels ashamed of having occasional nights off, or of operating under a rota system. He is not ashamed to have proper holidays, like everybody else, and he does not have to look round for a locum and pay him before he can go for a holiday.
I do not agree that we should shut all cottage hospitals, but many of them are deficient in terms of what they are setting out to do, because they do not have the facilities that will enable them to keep up with present-day practices.
The whole image of the family doctor has been improved, and his morale has consequently risen. The television programme "The Doctors" has done for G.P.s what "Emergency Ward 10" did for the hospitals; it has taken us into their everyday lives and shown us that there is a little glamour and excitement at the same time as a lot of hard and routine work, all of which is extremely interesting.
General practitioners should be called family doctors. They are there to treat families. They are there to help with social problems. They are dealing with social medicine. They are often dealing with patients whom they know from the time they are born until the time they die. At the same time, the increase in psychological medicine and in mental illness means that the family doctor must have a far greater knowledge of psychiatry than ever before. Above all, the family doctor is somebody to whom we feel we can go, without fear or hesitation, in time of trouble.
I fully support the proposals in the Green Paper for the democratic control of the Health Service—something that the Labour Party has been campaigning for many years. I want to do away with the self-perpetuating oligarchy of the people who are running the service in regional hospital boards and management committees. A Fabian pamphlet reported in 1962 that only one of the 15 chairmen of the regional hospital boards was a Labour supporter. We all want a greater autonomy in the running of the Health Service, but I would not agree with the noble Lord the Member for Hertford (Lord Balniel) that half the people on the area health authorities should be professional. I do not know what he means by "professional"—

whether he means hospital staff or doctors.
Very little has been said about Chapter 5 of the Green Paper, dealing with the rôle of voluntary organisations and voluntary work. The Paper recognises the important contribution which these have made to the working of the service. In Halifax, we are very fortunate in having a constituency which is rich in voluntary workers and voluntary organisations. I would remind the House of a few which can exist—perhaps hon. Members are not lucky enough to have them in their constituencies: an association for the disabled, an association for spina bifida and hydrocephalus, a branch of the British Polio Association, a branch of the Royal National Institute for the Deaf and of the National Association for Mental Health, the Multiple Sclerosis Society and the Spastics Society. All the people working for these bodies want it made clear that they want to co-operate with the welfare department—not to interfere or to take its work away. They hope that this will be recognised by official bodies.
Recently, in my constituency, a single woman, aged 70, Miss Lucy Dobson, who lived alone, was found dead after some days and nobody had known about it. This sort of thing should not happen if there is co-operation between welfare organisations and voluntary workers, but, above all, if the people living next door show an interest in their neighbours.
I hope that the Green Paper will hold out far more liaison between voluntary welfare workers and those who are paid. I know that grants and subsidies will be available to support voluntary bodies which provide and promote services within the general scope of the authority's responsibilities. Here we have a financial element in the Green Paper which has not yet been mentioned, and it is very welcome.
What are my right hon. Friend's intentions about an Ombudsman? They are a bit vague in the Green Paper. If the B.M.A. objects to the idea, will the Government nevertheless go ahead with this excellent idea, which, I believe, has the support of the general public and the medical profession?
I agree with what has been said about the complete chaos over occupational health services. This has always been


something which the Labour Party has advocated. It has appeared in our election manifestos and for years it has been dealt with by the Ministry of Labour and then the Department of Employment and Productivity and suddenly, out of the blue, we find it in the Green Paper—but not a proper section: it has a little reference at the end. This whole matter should be cleared up. The House should know who will be or is now responsible for occupational health. Is it the Department of Employment and Productivity or the Secretary of State for Social Services or a bit of both? A third of our lives is spent at work. Industrial diseases and accidents are a major cause of morbidity and mortality, and this is a vitally important subject which deserves more than just a mention in the Green Paper.
I should like to refer to the financing of the Health Service—not because it is in the Green Paper which is about structure, but because the noble Lord thought that it should be in the Green Paper. My hon. Friend the Member for Willesden, West (Mr. Pavitt) felt that the Conservative Party and the Government were at one in this debate, but the noble Lord made it clear that he is not at one with the Government about how to finance the service, which is a very important factor. I should not like the Conservative Party to come to power to implement the Green Paper and, at the same time, to finance it, as many of them have suggested, partly by payment from patients.
Hon. Members opposite are very vague about this. What proportion of the gross national product would they pay into the National Health Service? Would they cut N.H.S. spending? It has been said that there would be some cuts in social service spending by the Conservatives. If they would cut the service, how and where? To what extent, if any, would patients have to pay? Would they pay for hospital meals or towards visits from family doctors? Occasionally, speaking in the country, Conservatives hint at these things, but we are never clearly told what they would do if and when they come to power. I am highly doubtful about how the financing of the service would be managed by the Conservatives, so I believe that only a Labour Government could implement the Green Paper satisfactorily and carry on the tradition of the Health Service which they started.
Finally, whether those who work in the service work in our present structure or in the new structure, whether they are paid or voluntary, it is those people who have made the Health Service what it is and have given it its great tradition of service to Britain. So the structure, although it is important, is not so vital as the people who are working within it.

8.7 p.m.

Mr. Arthur Jones (Northants, South): The hon. Lady will forgive me, I hope, if I do not reply to the financial questions which she raised, and which, I agree, are of fundamental importance to the reform of the National Health Service. But I, too, hope that any revised system will find a ready place for the voluntary workers. This aspect seems to have lessened in the past 20 years, and I hope that we shall see a revival of it in our reorganised arrangement.
I was also pleased that the hon. Lady spoke in favour of a greater autonomy for the Service. This feeling has been reflected in the debate. The hon. Member for Manchester, Exchange (Mr. Will Griffiths) was concerned about public participation, and the hon. Member for Cheadle (Dr. Winstanley) mentioned the different emphasis which there is bound to be in various parts of the country—the different demands on services, and so on. The hon. Member for Willesden, West (Mr. Pavitt), with his wide knowledge of medical affairs generally, added his voice to this plea.
We all recognise that no one is better placed than the Secretary of State, who was previously a Minister of Housing and Local Government, to bring overall consideration to this and to appreciate the problems of both these great services. I recognise the force of his advocacy, but we need to consider further the fundamental issue of principle open to dispute in the Green Paper, of whether or not the Health Service should be integrated with the new structure of local government—I emphasise the word "new"—or whether it should be, as the hon. Gentleman maintained, allocated to area boards.
I welcome the fact that the boundaries of the new unitary authorities and those of the area health authorities are to be coterminous. In the main, they are to be in so many respects separate from local government. When the right hon.


Gentleman was trying to draw a line for us between health on one hand and welfare on the other, I thought I saw his hand shaking on many occasions, indicating that it was a very variable and difficult line to determine. This was emphasised by the hon. Member for Cheadle. The Maud Commission strongly favoured the integration of the National Health Service in the new structure of local government on the ground that that solution would secure democratic control of the service and the necessary degree of co-ordination between health and welfare.
This picks out the difficulty that the Royal Commission saw in such an arrangement as is proposed in the Green Paper. Paragraph 19 of the Green Paper gives reasons for rejection of such a solution. They are firstly medical pressure for a service operated by independent bodies, run by themselves and assuring clinical freedom, and secondly the financial position of local authorities, their limited resources and the scale of health service expenditure.
Paragraph 24 of the 1968 Green Paper said:
The arguments in favour of a fully unified administration of the health service must therefore be looked at alongside the need for co-ordination over a wider field in the light of the recommendations of the Seebohm Committee and the Royal Commission on Local Government in England.
The Government have constantly reiterated this point, and, speaking at Scarborough at the A.M.C. conference in September last, the Prime Minister said:
Democratic viability will be enhanced if we can achieve a degree of local government efficiency which makes possible a meaningful transfer of some responsibilities from central government to new local authorities.
The two policy documents—the White Paper on Local Government Reform and this Green Paper—have led to a loss of local government power and the accretion of authority to the central Government. So much for the Prime Minister's hopes as expressed at that conference, and, as it was thought by many of us who attended, his intentions, too.
Paragraphs 90 and 91 give positive assurances about the point made that there will clearly be an accretion of power to central Government. Paragraph 90 reads:

In order to maintain an effective direct relationship with about 90 area health authorities, the central Department will need considerable reorganisation. There will need to be strengthened regional offices and much more interchange of staff between the area health authorities and the central Department.
Clearly, it is envisaged that there must be, if the central Government are to supervise 90 area health boards, a great deal of strengthening of central Government.
Paragraph 91 says:
Certain functions which are at present performed by Regional Hospital Boards will in future be performed by the Central Department "—
Here again there is a shift—
particularly the programming, planning and execution of major building schemes.
We have the clearest possible indication of strengthening of central administration.
I wonder whether such a proposal is part of the Socialist philosophy or has it come about because those responsible for these decisions look for a tidiness in administration and co-ordination at central Government level. This might be described as "Crossmania"—an infection generated by professionalism. The right hon. Gentleman is so keen on a tidy system of administration. This is reflected in the Green Paper and in the proposed reform of local government where no recognition is made of the wide differences of place and circumstances throughout the country.
The reasons advanced for the rejection of Maud, by the Government, must be examined. There is medical opposition. The hon. Member for Cheadle has emphasised that it is the clinical freedom that the profession is looking for rather than professional freedom. It has been deeply opposed to any connection of the Health Service with local government since the negotiations before the 1946 Act. The Maud Commission accepted this point in paragraph 361, when it said:
We agree that local government as at present constituted could not run the service.
Here we have two great reforms in progress. Ought we not to be looking at the time-scale and opportunities in terms of decisions?
The Maud Commission goes on to say:
But our recommendations for the reorganisation of local government, taken together with


the proposals for sweeping changes in the administration of the health service, completely alter the position and raise in a quite new form the question whether local government can take charge of the National Health Service.
It seems that the B.M.A. is as rigid and dogmatic and unqualified in its attitude now as it was in 1946, and that it rejects changes that have taken places between now and then. I agree with those who say that this attitude is difficult to justify. It has been suggested that it is totally unreasonable. In its statement on the 1968 Green Paper the B.M.A. said that the profession was
… opposed to the transfer of the administration or financing of the health service to local authorities, either in their present form, or in any modified form under which the Health Service would be subject to the fluctuating and conflicting pressures of local government.
Surely there must always be, in any service in which there has to be public accountability, a continuing dialogue of questioning and debate on the services to be administered.
I am sure the doctors would not wish to put themselves in isolation in that respect. The Government have accepted that the National Health Service could be made more democratic. What is more fundamental to the profession than that there should be some scrutiny and control of expenditure by locally-elected representatives, even in the third representation on the area health boards. That certainly will be a brief to which the profession will be asked to speak.
Rightly the profession wants its medical independence and integrity to be retained. I was interested in the remarks of my right hon. Friend the Member for Chelsea (Mr. Worsley) in that respect. Professionally, so does the borough engineer and the director of education. The borough engineer would expect councillors to tell him not how to build bridges but where to build them, and this is surely the proper relationship. The same can be said for the siting of hospitals, forward planning and expenditure decisions on the health service.
Polarisation of professional interests is commonplace in British society and this has undoubtedly given us a high standard—perhaps unrivalled elsewhere—but unity and common purpose is essential. A finan-

cial and management discipline is a growing necessity if the full contribution to the economy is to be assured. Does the Joint Under-Secretary think that the Secretary of State's attitude arises from the pressures to which he has been subjected by all the welfare professions, and does he think that the opposition is growing or diminishing?
On 9th March last the hon. Member for Loughborough (Mr. Cronin) asked the Secretary of State:
Will my right hon. Friend attempt to persuade the medical profession to overcome their prejudices and to agree to some integration of the area health authorities with a reformed local government?"—[OFFICIAL REPORT, 9th March, 1970; Vol. 797, c. 899.]
That question, coming from a distinguished member of the medical profession, is significant, and the Secretary of State took the point. I myself will need to feel satisfied that there is strong and continuing opposition from the doctors themselves.
I recognise the difficulties with which the present Government and any future Government will be faced in this respect. Perhaps we need to wait for a reform of local government, when a reformed local government will have a chance to show its effectiveness and ability in the new circumstances created by that reform. We hope that reformed local government will grow in stature and independence from central Government. I was particularly interested when the hon. Member for Cheadle said that he looked for a co-ordination of health and welfare services on some basis alternative to that proposed in the Green Paper. It may be that health and welfare responsibilities will be advantaged if attention is increasingly directed towards their administration by local government, rather than their being kept isolated, as would be the case under the Green Paper proposals.
I base some of my hopes in this respect on the fact that unitary authority areas and the metropolitan districts are to have boundaries coincident with the area health authorities. I still hope that further consideration will be given to the possibility of greater co-ordination. I welcome these coincident boundaries, and I hope that there will be at least some sympathy shown by both Front Benches for the arrangements I advocate.

8.22 p.m.

Mr. John Golding (Newcastle-underLyne): I welcome the Green Paper as a step towards more democratic control of the Health Service, but I do not believe that it has gone quite far enough. There are three problems: the general tone of control of hospitals; the difficulties of making complaints against the Health Service; and what I consider to be a deterioration in the standards of general practitioner service. Previous speakers have seen this debate as being between national and local control, but I do not see it in that way at all. The patient in a hospital bed is not concerned with whether control is national or local. His concern is with the general atmosphere within the hospital, and the general tone of its administration.
There are very great differences in the general atmosphere in hospitals. The St. George's Hospital at Hyde Park Corner and at Tooting are, to use present-day jargon, centres of excellence. They have always been concerned with the welfare and well-being of the patient. They have in recent years pioneered such changes as late rising, choice of menu and flexible visiting hours. They have made efforts to reduce noise. They have concentrated on the welfare of the patient.
As I have said on other occasions here, for a patient the hospital is not only a place in which he is given medical treatment, but a place in which often he may have to live for very long periods, so the social amenities and general atmosphere of hospital life can be very important.
I consider St. George's to be excellent, but there are other hospitals that do not in any way reach the same standard. In some, patients are made to feel under an obligation. They are made to feel that in some sense they are intruding upon a closed community. That atmosphere has existed from the old charity days.
The problem, particularly in some provincial hospitals, is one of breaking or at least curbing the influence and power of the consultant. When the consultants gave their services free they expected that the hospitals would revolve around them. In too many instances the hospitals did revolve round the consultants rather than round the patients. We need a complete break from the charitable hospital service. Even today, working-class people

stand in awe of the consultants. They are loath to exert what I consider to be their proper rights, because they think that by doing so they will be giving up their chance to get better. As a result, they put up with treatment and conditions that are, in a social sense, really intolerable.
It is very important that the hospital service should be made very much more democratic. My hon. Friend the Member for Halifax (Dr. Summerskill) has already referred to a Fabian Society study, "Unpaid Public Service", which has revealed that regional boards and boards of governors are completely unrepresentative. The boards contain far too many of the old ruling class and far too few working-class members. Their chairmanship too often goes to those who have always thought it their divine right to rule.
I should like to see elected boards to which were co-opted representatives of workers and of the professions, and a system of control much closer to that of education than the Health Service. Elected boards would get rid of two things which I find objectionable at present. One of them is the over-dominance of the consultant, in the affairs of the hospital, and the other is the mysterious way in which the Secretary of State at present appoints members of hospital boards. In passing, I must say that I, too, am a member of the board of governors of a teaching hospital.
One of the big problems, which is brushed aside by the Green Paper, is the creation of a health commissioner, who is very badly needed. It is coming more and more difficult for people to process their complaints against the Health Service. I have watched this over the last few months in the City General Hospital, Stoke. Mr. Harry Shaw objected very strongly that his wife, who hard a cardiac condition, was put in a ward with suicide cases. Mr. Shaw quickly found that a number of patients and their families objected to persons with cardiac complaints being put with patients who were violent and very noisy. He has been frustrated at every turn in arguing his case, because the very people to whom he was appealing were those who took the decision. He has never been able to get at the reason why the hospital refuses to make necessary changes very quickly.
I do not think that we should be over-concerned with the doctrine of clinical freedom. Since the introduction of the Health Service we have been paying for a service. Because we pay for it, we ought to have some very easy means by which we can make complaints. Unfortunately, the medical profession has been able to clothe itself in a great amount of secrecy. It has been able to create an aura around itself which makes it difficult for many to challenge what its members do. As a result of the creation of a health commissioner, practitioners would become not only more accountable but some of this mystery would be stripped from them.
My hon. Friend the Member for Halifax said that the image of the family doctor, the general practitioner, was improving. In my experience, that is not so. More and more people grumble about the general practitioner. Increasing numbers of general practitioners take the weekend off. More and more of them take the evening off. I would be the last to oppose this, but, unfortunately, adequate arrangements are not always made when doctors take time off. In the village next to where I live, in my constituency, at the weekend from a practice in which there are four doctors it is often impossible to get one. One may ring up to say that someone is sick and one is told to go to a chemist to pick up a prescription. No doctor comes out and no examination is made.
This is diagnosis by telephone. This situation is unsatisfactory and people see that it is unsatisfactory. I do not for a moment say that doctors should not have adequate time off. I have always supported the idea of group practice and health centres, but doctors have to be very careful to see that adequate arrangements are made so that people can easily contact them.
This brings me to another grumble against the general practitioner service. There is a growing practice of having an appointments scheme by which a general practitioner can be seen in his surgery. For a second visit this obviously is very sensible. When a doctor sees a patient for the first time he is well advised to tell him, "If you come on Tuesday at 10.15, I shall see you without you having a long wait." That is

satisfactory and I would not condemn appointments schemes out of hand, but at present patients who want to see a doctor for the first time are told that they must make an appointment.
A person may feel ill on Monday morning and find that he has to wait three days before he can see a general practitioner. This is very undesirable. It is made worse when a condition is placed on the patient that he must ring up. Many old people do not want to use the telephone. They find it difficult to get in touch with a general practitioner in that way, but there is little that they can do about it. They see a marked deterioration in the standard of the service they get.
These are problems to which the administration of the Health Service has to address itself. We can be highly philosophic and discuss the service for hour upon hour, but if we do not find a way in which ordinary people can find satisfaction and get service and are able to express their grievances, we shall not have a democratic service. It is that towards which the Government ought to be working.

8.36 p.m.

Mr. David Crouch: I do not intend to follow the hon. Member for Newcastle-under-Lyme (Mr. Golding) on all the points he raised, but he touched on one aspect of the National Health Service that I want to speak about. That is the problem of producing a more effective general practitioner, or family doctor, service.
I take up the point made by the non. Member for Halifax (Dr. Summerskill) who, as a doctor, is extremely well in formed on the working of the medical profession and the National Health Service. I think she is not well informed on the intentions of my party relating to producing additional moneys and channelling additional finance into the Health Service in general. She asked: where would the Conservatives find the money; what would they cut?
I thought that we had made clear that we want to give people an opportunity to channel some of their earnings and savings towards providing for themselves and taking some extra responsibility for themselves on top of what we provide through the National Health Service. In


other words, we want to provide another channel of money into the Health Service. It is not irresponsible for us to say that in a high wage economy and a highly industrialised society which is expanding, albeit slowly.
I shall address myself to some things that the Secretary of State said in his very good speech. The valuable and constructive contributions made in this debate make the debate a useful and important prelude to what should follow What follows now? A White Paper, like a Green Paper, can be filed away. I am concerned that the debate should not be all words and high hopes, because hon. Members on both sides have pointed to deficiencies in the service and to the problems being faced by practitioners and patients. The high sounding words used by the Secretary of State must now lead to business. I hope that the right hon. Gentleman means business. He will have my support if he does.
One of the right hon. Gentleman's phrases was that he wanted to create out-of-hospital dynamos like group practices. His first conclusion was that he wanted to see—I took a note of this—"A rapid expansion of health centres and group practices". In pronouncing these telling phrases he said that he was determined to create within the service an efficient system of preventive medicine. The right hon. Gentleman said, finally, that he hoped that it would not all end as a pipe dream. He even said that he was determined that it should not. It is important that this must not be a pipe dream and that the phrases come to fruition in practice.
I like the phrase "the family doctor" used by the hon. Lady the Member for Halifax in preference to the phrase "the general practitioner". I dislike the word "team", because a group surgery is more than a team of two or three doctors practising together; it is a group surgery, a health centre, a group of doctors assisted by members of the National Health Service—midwives, nurses, health visitors, and secretaries. Suddenly we see the family doctor service meaning something, to such an extent that it can prevent people from having to go to hospital, and perhaps overcome the domination of the hospital.
Paragraph 1(iv) of the White Paper gives as the first principle of the new health centre:
The service should be centred on the family doctor team. The general practitioner provides the essential continuity to the health care of each individual and each family and mobilises the services needed. His ability to do so can, howver, be limited by the administrative barriers between the different parts of the service.
Ay, there's the rub.
I have come up against this barrier in my constituency recently. I have written to the Under-Secretary about this, and he has agreed to see me this week. It was decided by the executive council of the London and South-East Region that Herne Bay did not justify a health centre. Eight doctors in three practices decided that they would like to form a group practice and a group surgery. Three years ago they learned that the G.L.C. was building a 12-storey home on the sea front at Herne Bay as a place of retirement for old people coming from London. The doctors thought that it would be a good idea to put the group surgery on the ground floor of this building, thus providing a group surgery—a family doctor service—not only for the old people, but for nearly 20,000 patients on their lists.
They got into negotiation with the G.L.C., and the project was accepted. But they ran into an administrative difficulty. There exists a requirement that the executive council of the London and South-East Region should ask the local district valuer to assess the rent for any such development. The G.L.C. rent for that building was assessed at £4,373 a year—a fixed rent over a period of 80 years, with no review, based on an 8 per cent. return on the total capital cost of that building.
The administrative barrier is that the district valuer working to his book—a different book—has assessed the rental at £2,375, a difference of almost exactly £2,000. It means that if the doctors are to get their group surgery, they will have to find £2,000 out of their pockets. They were prepared to find something, but they cannot afford that amount.
The impasse that we have reached in this case is that the G.L.C. is now considering making plans for some other occupation of the ground floor of that building. We shall not have that group surgery, not because of any lack of will


on the part of the doctors—who are desperately keen to provide the service—not because of lack of good will or understanding on the part of the G.L.C. or on the part of the National Health Service area council, but simply because there are two rule books, one for the district valuer and one for the G.L.C. Here, surely, is a case where we need to see some power at the centre to enable a decision to be made further down, or else some power that has already been devolved further down to help overcome that impasse.
I mention this not purely as a constituency point but because I think it illustrates a deficiency in the present structure of the Health Service. Here we have doctors who are keen to provide a better service outside hospital and are willing to go through the whole administrative work to achieve that end. That group surgery would have provided accommodation not only for eight general practitioners but for three nurses, two health visitors and one midwife, as well as secretarial staff. The other six persons whom I mentioned would have come through the auspices of the county council.
It has been said that the Health Service has been starved of money. That is not an exaggeration. This is one of the most important of our social services, and we have seen before that it has suffered from inadequate finance. What I am concerned about is that if it is starved of money it should not also suffer from a surfeit of bureaucracy. Perhaps that is a hard thing to say, and I hope that the Joint Under-Secretary of State will be able to tell me later this week that he has been able to resolve this difficulty.
I hope that in the future we shall not continue to suffer from the same problems. The Secretary of State this afternoon told us that he intends to have wide powers. He suggested, I believe, that these powers will be as strong as those of a Persian king. I would prefer that to his having insufficient powers and being, like a Persian eunuch, able to do nothing. I hope that he will step in with all the power that he can get as Secretary of State. I hope that he will get results not only in the case that I have mentioned but in the future, following on his brave words, both written

and spoken. I trust that having received money and a new structure, the National Health Service will not suffer from frustration among either its practitioners or its patients.

8.50 p.m.

Mr. Leslie Huckfield: No one knows better than my right hon. Friend the Secretary of State the feelings of my constituents and myself about the Birmingham Regional Hospital Board. In that, I cannot follow the remarks just made by the hon. Member for Canterbury (Mr. Crouch), though I am grateful to him for so gracefully giving me the opportunity to take part in the debate.
My constituents and most of those in Midlands constituencies come under the auspices of the Birmingham Regional Hospital Board, one of the largest regional hospital boards in the country. We have all felt for a very long time that it is very remote and far too powerful, and that we should have more democracy in the control of our local Health Service facilities. It is in that context that I am pleased to welcome the publication of the second Green Paper as a definite improvement not only on the present structure, but on the first Green Paper.
I compliment my right hon. Friend on the care he has taken and his courtesy to the House in circulating both these Green Papers. On a matter so important as the control and administration of our health services it is a very good idea that we should have a thoroughgoing discussion of all the proposals as they are being formulated.
I said that my constituents have suffered very much because they feel very strongly that their hospital services are being remotely controlled from Birmingham. The whole of North Warwickshire, with a population of over 200,000, still does not have adequate and direct representation on the regional hospital board under whose auspices we find ourselves. It is for that reason that many of us in my part of the country have for long campaigned for the reform of the administration of the Health Service. A petition is circulating in my constituency, bearing a large number of signatures, and I hope that it will be presented by some of the organisers, among them Mr. Joe Dyer and Mr. Joe


McHale, to the meeting of the Birmingham Regional Hospital Board on Wednesday. This is one endeavour to overcome the shortcomings caused by the lack of democratic machinery in the present administration of our hospital services.
When my constituents, on their own initiative, have to gather petitions like that to make their case heard, when we have to go to those lengths to stress our case for what we consider to be a very good site for a new casualty and accident centre, surely there are very serious shortcomings in the machinery for the participation of local interests.
I praise the concept put forward in the second Green Paper of the unification of the tripartite system. It has always seemed to me rather ridiculous that the family doctor comes under the executive council and the hospital doctor under the regional hospital board, and yet someone like the midwife can come under the control of the local authority. I am very glad to see progress being made towards the unification of this tripartite system. However, one thing that worries me is that we could run the risk of all the concentration of power that I believe to be the very serious downfall of the present system. In my area we have just seen the construction of a brand-new, very expensive hospital in Coventry, at Walsgrave. We all know that the pull of this new hospital will be felt just like that of a magnet. It is already being felt as regards staff and facilities. I can only hope that if we are to have an area health authority based on the unitary authority proposed for my area we shall not have the kind of concentration at the hands of Coventry that we have had in the past.
I should like to make a point that very few hon. Members on either side have made tonight. I believe that many hospital boards and management committees must seriously examine their public relations. Indeed, the public relations of the whole National Health Service must be seriously re-examined. People want to know why they are kept waiting for long periods in hospital queues when they have been given definite appointments, and why they have to wait so long, very often, to get into hospital.
As my hon. Friend the Member for Manchester, Exchange (Mr. Will Griffiths) eloquently expressed it, people want to know why other people very often get preference in the queue. It is this kind of thing, both at local and regional level, all the way from the patient's appointment to the control by the regional board, that the hospital services must explain things a lot more in a campaign for better public relations.
I hope that many more boards, and the new area authorities, when they get off the ground, will admit both Press and public to many more of their meetings. This is, after all, our Health Service. It should be a democratic service and one in which we all can feel that we have an interest and can play a part. I am glad that my right hon. Friend has taken power to permit the local authorities to appoint representatives to the new area health authorities, but I wonder why we cannot have direct election to those new authorities. I had always thought that the Labour Party—I do, personally—felt a strong commitment to what we have always called a "democratic Health Service". For far too long we have been at the mercy of Ministerial appointments to regional boards and hospital management committees.
Now, however, we have the basic machinery for a thorough-going overhaul of the system. Let us grasp the opportunity in both hands and for the first time have direct elections and thus form the basis of a truly democratic Health Service. I want to see far more participation by local people, whether elected councillors or not, and not only by voluntary organisations but by trade unions as well. On the Birmingham Regional Hospital Board, because of the appointments made in the past, the representation of trade union interests is particularly lacking. We should grasp the opportunity now before us so that once again we can bring the people into the feeling that they have a part to play in the running and control of their local health services.
My constituents and people in North Warwickshire generally feel that we suffer particularly because no resident of our area is a member of the Birmingham Regional Hospital Board. It seems wrong that there is not a member of the board representing a place 30 miles from


Birmingham. I have had to go to members of the board who live in Birmingham to find out what is going on. Indeed, I go further. Very often my most direct way of finding out what the board has in mind for my constituents is to put a Question to my right hon. Friend in the House. That is wrong. I and my constituents have a right to know what the board and the planning authorities have in mind for us.
Now we are given the opportunity to break fresh ground. Let us bear in mind that, although the professional medical people have a right to their say, and although my right hon. Friend, who will allocate a great deal of the money, has a right to make his appointments, it is the people who count. It is the people who are the patients, the users of these services, who count.
I want to see the opportunity, on the basis of the Green Paper, of a lot more participation on the part of the people in the Health Service. If we cannot get this increased participation, if we cannot see the full body of local organisations and interests represented in the future administration of hospital services, then I believe that the Green Paper and its concept will have failed.

9.0 p.m.

Mr. Maurice Macmillan: The hon. Member for Nuneaton (Mr. Leslie Huckfield) and my right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) have reminded the House that, in discussing the Green Paper, we are indirectly discussing the impact of a service provided by the Government and by the local authority, directly or indirectly, on people, whether they are patients or whether they work in the Health Service. If I do not follow that line, it is not because it is unimportant but simply because we are discussing a machinery paper.
One point of agreement throughout the debate is that true unification of health and welfare has been admitted by almost everyone to be impossible if it requires that health should be put under local authorities or welfare under the Health Service, with the exception of my hon. Friend the Member for Northamptonshire, South (Mr. Arthur Jones) who, in my absence, developed a slightly contrary point.
This solution is rejected by the Green Paper, and I do not quarrel with that. We have the problem of the organisation and structure, and the need for a form of demarcation, and it is the compromise solution to this problem that has largely led to the points of difference in our discussion on the Green Paper, a solution which the Green Paper recognises to be tentative and the detail of which is meant to be discussed in further consultation.
We have said, in terms of the ancient Church, that it is impossible to heal the schism between East and West, but we hope that we can achieve a similar result by establishing full communion between the two Churches. In this way we hope to achieve the four main aims set out in the preamble to the first part of the Green Paper—unification, co-ordination, local participation and effective central control. We all admit that these aims would be more likely to be achieved were greater unity of health and welfare possible at this stage, and I hope that we all admit, too, that, in trying to solve the interim problem, we should do nothing to make a more effective solution difficult or even impossible.
The problem is twofold: where to draw the line between health and welfare, and how, having drawn that line, to ensure unity of approach between the people concerned. That has been one strand of the argument. The other strand has been how to reconcile decentralisation with effective control, as the hon. Member for Willesden, West (Mr. Pavitt) argued in some detail. There is here a slight contradiction between the concepts put forward in Maud, on the one hand, and the Green Paper and the Local Authority Social Services Bill, on the other. Maud, and, indeed, Porritt before him, were for decentralisation, but, on the whole, for the greatest possible degree of unity between health and welfare.
The Green Paper is for centralising, to some extent at least, and the Local Authority Social Services Bill, although it centralises the welfore services, in some ways enshrines the split between welfare and health. The hon. Member for Cheadle (Dr. Winstanley) said that the structure cannot in itself remove obstacles or solve problems; all it can do is not to prevent functional changes and not to make it harder to get things done.
This Green Paper, rather than removing obstacles, merely changes and moves them around. It is an improvement but both generally and in detail there are some new contradictions in the proposals, and, I must regretfully say, some missed opportunities. This has emerged from speeches on both sides of the House. In his opening remarks the Secretary of State was up to his old psychological warfare tricks. He was presenting what might be called argument by juxtaposition. He described the proposals in some detail, and although, with some uncertainty perhaps, how they would develop. There were certain changes as the debate developed.
Then the right hon. Gentleman listed the benefits that he expected the proposals to achieve, but he did not develop any argument as to why these ends should follow from the means he described. As usual, the bland charm was such that one tended to forget that there was no logical connection between the two parts of his argument; one merely accepted it despite the lack of a connecting link. I want to consider this under the four main objectives he has set out in the Green Paper and developed in his speech.
First of all, unification. To quote paragraph 6, this means
… not only must the different branches be controlled by the same authority but the separate services must be integrated at the local level.
Paragraph 69 points out that the integration should be functional. There is a slight danger of a functional division of the medical, nursing and administrative officers as mentioned in the paragraph, following separate chains of command, whether to Department, regional office or downwards to district committee. I am all for unification, but there is not much point in changing to a troika from a tandem unless we are certain that all the horses are pulling in the same direction. Paragraph 69 identifies as the only permissible separate statutory committee that set up for the family practitioner services.
That paragraph and the preceding one were a little confused and I was uncertain who decides finally on the size and organisation of practices, on new or additional practitioners, on the cost, what

happens to a doctor who has too large a drug bill, and so on. In other words, I am thinking about the degree of autonomy or otherwise that the new statutory committee has. How much is it a creature of the area health authority and how much does it retain the semi-independent status of the present executive council?
What about health centres? My hon. Friend the Member for Canterbury (Mr. Crouch) produced a sorry tale. Who, under the new dispensation, is to own them? Who deals with the practitioners occupying and running them? When we go back to the statutory committee, what are its relations with the Department, with the regional committee, the district committee and so on? It is a minor matter to some extent, but it is possible that it could be a source of disunity, especially over the regional committee function. My noble Friend the Member for Hertford (Lord Balniel) pointed out that it had no executive functions which had been taken away from it and given to the central Government. It has, probably, acquired executive or advisory functions.
I should like to see in the health authority the deployment of senior medical dental and scientific staff as well as advisory services about planning, teaching, developments, ambulances, and so on. There is an area of uncertainty there which my right hon. Friend the Member for Reigate pointed out in saying that it was all very well talking about deployment, but what about employment. He also made the point, as did other hon. Members, that the continued existence of the occupational health service under the Department of Employment and Productivity is in itself a division in the unity and a breach of the principle which led us all to welcome the abolition of a tripartite system.
I need not go into the argument any further. It has been amply stated, but the analogy with the school health service is close. It is rather ludicrous to think of the Health Service dealing with school children remaining under the health authorities while young persons in employment cease to be under the health authority at all. It could also have some ill effects on the prevention of ill-health and on health promotion, mentioned, incidentally, in paragraph 7 of the Green Paper.
So much for unification. I should now like to turn to the second objective set out in paragraph 6 of the Green Paper, that of co-ordination. The Green Paper says that that objective is
To establish close links between the National Health Service and the public health and social services provided by local government.
If I may digress here, I should like to say how much I myself hope that responsibility for child guidance, which paragraph 37 leaves uncertain, should become a function of the health authority. It is more and more becoming a hospital-based function although perhaps mainly orientated towards the community. It is taking place more with the development of health services and group practices in clinics and it is rather more than a mere family counselling service with a rôle of a school coming in as well as the parents. It is not easy to draw the line. I am not being dogmatic about it, but I hope that the claim of the health authorities for child guidance, with the development of psychiatric techniques, will be established.
With regard to other methods of co-ordination between the local authorities and health services, despite the Secretary of State's explanation to my hon. Friend the Member for Chelsea (Mr. Worsley), I am still a little confused when it comes to social workers and doctors as to who exactly employs who and when. I gathered that any social worker operating in the Health Service will eventually be employed by the local authorities on loan, or seconded to the area health authorities. Conversely, any doctor or Health Service worker used in any way by the local authorities will be employed by the area health authorities and will be on loan or seconded to the local authority concerned.
There are, incidentally, some rather confusing remarks about the community physician in what appears to be, from one paragraph of the Green Paper, a dual rôle and, to me, some equally confusing remarks about honorary appointments. But I have no doubt that in due course all this will be made clear.
I am concerned about the "when"—that is to say, the position during the transitional period, especially after the medical officer of health has lost a lot of

his functions and before he is established as a community physician. There are considerable worries about the potential situation which can develop if there is a delay between the implementation of the Local Authority Social Services Bill and the implementation of whatever measures flow from the Maud Report and the Green Paper. It seems to me that, when one comes to the question of coordination, this problem calls for careful handling in the transition period lest a situation develops which could make close co-operation between the individuals and groups involved harder when the final establishment of area health authorities comes.
I come now to the question of local participation. This is especially likely to be affected in the transition period, partly because members of regional hospital boards, hospital group management committees and other bodies are voluntary workers, people who can easily be discouraged, who could be difficult to regain once lost, and who have done a great deal of excellent work.
I say again that this applies not only to the voluntary workers and part-time people but to all those who are working within the Health Service and who are concerned about what may come with a degree of centralisation on the welfare side—perhaps their fears are unjustified—within the new unified structure, some of the functions of health being taken over by the welfare side of the local authority, and the new health authority not being there to establish a new rôle.
Great concern is felt, and perhaps it will be possible before firm conclusions are reached, in the course of the discussions which the Secretary of State is to have with all concerned, to allay some of the fears in advance of final solutions. All people want to know is that, whichever way round things go in detail, there will be a niche for them in one place or another which is comparable at least to the sort of rôle which they have up to now been expecting.

Mr. Will Griffiths: The Green Paper refers to district committees as, perhaps, being composed half of representatives of the area health authorities and half of local people. Has the hon. Gentleman any views about how this other half ought to be obtained?

Mr. Macmillan: I am grateful to the hon. Gentleman. He anticipates my next words.
I was turning to local participation and was about to discuss the district committees. When I was considering the course which the debate was likely to take, my first thought was: what do they do? How do they do it? All that the Green Paper says is that their functions require study. It is vague. There are some ideas about a liaison rôle; it is said that there is no statutory delegation, but the area may delegate—without saying how. We have had an improvement since then, I am happy to say.
In his speech, the Secretary of State said that the district committee has no statutory powers delegated to it, but, he said, it must devolve effective administrative authority. Those were his words. Again, apparently, there is no question of statutory delegation. Then, intervening in the speech of my right hon. Friend the Member for Reigate, the right hon. Gentleman said that there must be statutory provision for administrative devolution. I think that that is where we are now.
I imagine that that means that under Statute the area health authority must devolve administratively, but there is no statutory power automatically given as of right to the district committees. The area health authorities must give them some powers, but it is left to them to decide what powers they give. It is not to be laid down by the Department of Health and Social Security. Ironically, I tried to argue upstairs that the equivalent should be the case in the Local Authority Social Services Bill, but it was resisted.
Here, too, there is an important rôle to be played by local people, however they may be found and chosen. I am not altogether happy about elections for health service authorities. It is difficult to get people to vote in any quantity for local government without adding yet another election. Once we start on that we will have more elections than any of us would like. But there is a great rôle to be played by local people and by the voluntary organisations. I do not want to emphasise this matter, because many hon. Members have already spoken about it. However, I understand that the hon.

Member for Halifax (Dr. Summerskill) referred to one point which I should have welcomed had I been here when she made it, namely, the admirable arrangements in her constituency, with which I am familiar.
I turn now to the power of the area health authority as such. My hon. Friend the Member for Chelsea and other hon. Members had a good point about the Secretary of State having power to appoint a third of the members considering the complete control that having control of the cash gives. One cannot complain too much about some of the centralised functions that he wants relatting to planning developments and the execution of major building schemes, and so on. I am glad that the right hon. Gentleman agreed with my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) that his technique, even on capital development, is to be by the allocation of funds to the area health authority and to allow it to develop its own budgets within them and presumably to make representations to him in deciding the total range of allocation between it and conflicting schemes.
The Green Paper states that the regional councils do not supervise the area health authorities, but that they exercise some executive functions of their own as well as advisory functions. However, this is left unclear.
I am concerned about the planning side. The area health authority is to have some planning function, but there is an overall planning function in the regional council and a further planning function in the Department, all apparently engaged in the similar processes of assessing priorities between competing developments, forward planning, and so on. The regional council is to be advisory to both the area health authorities and the central Department.
This is beginning to look like a chain of command rather than a chain of control with the Secretary of State as the commander-in-chief. How does this chain of command or control meet the fourth objective—effective central control over the money spent on the service to ensure that maximum value is obtained?
We have here an apparatus which is very considerable. Looking at it, the Secretary of State has the Department


of Health, and Social Security, the Department's regional offices, 90 area health authorities, 14 regional councils, the National Health Service Advisory Council and so on. No wonder paragraph 90 says that the central Department will need considerable reorganisation and, I should think, considerable strengthening. What is the purpose in all this? The Secretary of State has said that it is not the policy of the Government to assume a rigid centralised control, but I cannot help feeling that that will be the result. This great apparatus and control is not really needed to abolish the tripartite system. It is not needed for co-ordination, nor is it needed for decentralisation—and, goodness knows, we have little of it. It stems from the confusion between the functions of control and operating management.
The type of organisation about which hon. Members on both sides have complained is not inherent in the structure set out in the Green Paper; it is not necessary for the financial control of the Health Service. The genuineness of decentralisation, which the right hon. Gentleman has described as his intention, and how much he can achieve this aim, depends more on the method of control than on the degree of control he is seeking to exercise. The apparatus which he is building for himself might well make control harder rather than easier, because the capacity to maintain control depends a great deal on devolution and delegation, just as genuine decentralisation depends to some extent on the existence of an effective centralised control.
This has been true of countless other organisations, military and civil, industrial and commercial. We have also seen how this type of structure, not unlike that in the Green Paper, can be made to work. The opportunity must not be missed to rationalise as well as to reconstruct the Health Service. The Green Paper is to be regarded as a preliminary sketch for a future structure. We can strip it off and start again if we want to. We can adapt it to a two-tier or one-tier system, and there is a degree of flexibility.
The point made by my hon. Friend the Member for Northants, South could be easily developed in the future if we could get the type of control which I personally would like to see in the Health Service—a control which allows representation

on committees and boards without too much interference with the day-to-day management, which must, as the Green Paper says, be entrusted to the team of experts and professionals within the service.
To sum up, there seems to be little in the Green Paper leading to the further unity between health and welfare. There seems to me to be little real co-ordination. There is change in demarcation for the better, but it does not go as far as it could. There is a considerable improvement on the first version of the Green Paper, but the matter needs more discussion, and perhaps more time.
This has been a good debate on a valuable piece of work. It ends the tripartite system, which we are all glad to see go. It outlines the skeleton of the structure on which we can build for the future. It is the beginning of a policy, but it is not yet a plan and is nowhere near a White Paper.

9.30 p.m.

The Joint Under-Secretary of State for the Department of Health and Social Security (Dr. John Dunwoody): No organisation, however well devised and manned at administrative level, can function properly without competent staff to serve it. I am sure that the House will join me if I start by paying tribute to the devotion and skill of all those who work in the National Health Service—the doctors and the nurses, the other professionally and technically qualified workers, the dentists, the pharmacists, the opticians, the scientist-technicians the physiotherapists, the radiographers, the engineering staff, the building workers, the maintenance and catering workers, and the porters—and keep the Service going. The Government suggestions have important implications for all these staff. The Green Paper devotes a chapter to the staffing of the service and the demands that reorganisation will make upon staff, the expansion of opportunity and the vital importance of ensuring that all available talent is deployed to the best possible advantage.
My right hon. Friend has made it clear in the Green Paper that the rights of existing staff will be maintained. The great majority of them will not be involved in any change of work or place of work. That will apply to most people


working in hospitals. Others may find that, although their present employing authorities will cease to exist, their work will continue in much the same form as now. For example, much of the executive councils' work will carry over to the statutory committees for family practitioner services. But, for those who are affected, careful advance planning is essential to secure that movement is effected smoothly and with full consideration for the interests and circumstances of the staff concerned.
Redeployment will require close collaboration between management and staff. My right hon. Friend has promised full consultation with staff interests on the principles of personnel movement to be followed and the establishment of a national staff commission or similar machinery. These arrangements will need to take account of whatever parallel arrangements are made for local government reorganisation. No decisions have yet been taken on the character and functions of a staff commission. This will require consultation with management and staff interests. It will also depend on decisions that have yet to be taken, after proper consultation, on the functions and organisation of the new authorities. But the one thing that is immediately clear is that the reorganised service is going to need staff of every kind, and the Department will not allow the experience and skill of those in post at present to be overlooked or dissipated in any way.
Turning to the question of teaching hospitals and looking at a subject that has been mentioned by one or two hon. Members in passing—the question of trust funds—this has caused some anxiety outside the House. The proposal in the Green Paper is that the area authorities will administer the whole of the hospital specialist services, including those administered by the existing boards of governors of teaching hospitals. The Royal Commission on Medical Education recommended, in terms of the present structure, that teaching hospitals should be brought within the main hospital administration under the regional hospital boards and special management committees. Many teaching hospitals are increasingly providing a district service, and this is something that we all welcome. There are

therefore the strongest possible reasons for incorporating them within the new area structure, which has as its objective the integration of the hospital and the community services at the local level.
This closer association with the community services will, moreover, be of benefit to teaching hospitals themselves. It will offer greater opportunities for the medical teaching and research carried out at the hospital to be broadly based on the services provided outside as well as inside the hospital. Many of us realise that in the past that research has been a little too concentrated on highly specialised units and has not always involved general hospitals and the community as much as it should have.
This will be of particular interest to regional centres, where our teaching hospitals also provide a large proportion of the district hospital services and also some specialised services on a wider regional basis. We must take special note of the views expressed on our proposals by representatives of the provincial teaching hospitals. As to London, my noble Friend the Minister of State is taking the chair on a working party which will consider the application of the principles outlined in the Green Paper to the special circumstances of the capital. The working party will look at the exceptional problems of the undergraduate teaching hospitals in their London setting.
Discussions with the teaching hospitals' representatives before the Green Paper was published established that there are certain matters about which they are properly concerned. One is that their administration should continue to reflect the interest which the universities have in these hospitals. I am sure that this is right. We have said in the Green Paper that where a health authority covers an area which includes a medical school, members of the university will be included in the membership. This is to ensure that the interests of medical and dental education and research are safeguarded and that related scientific expertise is available.
The proposal that there should be a district committee for the part of an area served by a particular district hospital and associated community services will apply equally to the case in which the district hospital services are provided by


a hospital normally designated as a teaching hospital. We shall give special thought to the membership of a district committee where a university or teaching hospital is involved and consider what special constitution may be desirable. My right hon. Friend is well aware of the need to consider strong university representation at this level on the district committee.
I should also mention the proposals for regional health councils. One of the suggested functions of these bodies would be to maintain close liaison with the university authorities on teaching and research.

Lord Balniel: The hon. Gentleman has talked about the discussions with the teaching hospitals and also with the regional hospital boards. The Green Paper is a discussion document which will lead to the production of a Government White Paper. I think the House should have available to it, before we discuss the White Paper, the views of the regional hospital boards, the teaching hospitals and the other organisations, because they are available to the Government—they are, clearly, well-informed—but are not available to the general public or to the Opposition.

Dr. Dunwoody: This, of course, is the point which the noble Lord made when my right hon. Friend was speaking, and I thought that my right hon. Friend answered it fully. There will be a large number of people putting forward views to us. It would be invidious for us to pick out some and reject others. We could not publish them all. All these organisations are free to publish, and many probably will publish, their views.

Lord Balniel: Then are the regional hospital boards free to publish the documents which have been made available to the Ministry?

Dr. Dunwoody: The regional hospital boards collectively are not necessarily free to publish their views, but there would not be any advantage to hon. Members or those others who are interested and involved in this subject if we published vast reams of information which has come from large numbers of organisations, some similar and some not so similar to regional hospital boards.
The educational bodies—the universities, the Royal Colleges and the new

Central Council for Post-Graduate Medical Education, when it is established—have the primary responsibility for organising and advising on education. They can do this effectively only in collaboration with a regional health agency of some kind, which can control the number and distribution of training posts. We certainly attach importance to the representation of the universities on these councils.
As regards finance, the approval of the area authorities' programme of capital and revenue expenditure will rest with the central Department. We have made it clear that the Department would ensure that proper account is taken of the needs of medical and dental teaching and research.

Mr. Fortescue: Before leaving the subject of teaching hospitals, would the Under-Secretary give some thought to Manchester and Liverpool, where the teaching hospitals are in groups called United Manchester Hospitals and United Liverpool Hospitals? Since, within the metropolitan areas, there is to be an area health authority for each metropolitan district, these groups will be in more than one health authority's area, and thus will lose some of their essential character. Could this matter be carefully considered?

Dr. Dunwoody: I assure the hon. Gentleman that I will take that point into account. The picture is not necessarily as he has presented it.
Consultations on the recommendations of the Royal Commission on Medical Education are not yet concluded. The future pattern of post-graduate education in London needs fuller discussion. Thus, it would be premature tonight for me to try to form conclusions on the future teaching hospital structure. However, I can assure the House that my right hon. Friend is well aware of that unique contribution of these hospitals, both nationally and internationally, in teaching and research.
One of the largest sections in the 1946 National Health Service Act, taking over four pages, related to the endowments of voluntary hospitals. With the exception of teaching hospitals, endowments were transferred to the Central Hospital Endowment Fund. In the Green Paper we emphasise the need to continue to


respect the local character of these considerable sums of money which have been given over the years. The suggestion is made that the trusts could be transferred to the new area health authorities. I have seen it suggested that what we are proposing amounts to appropriation or confiscation of funds. There is no question whatsoever of this.
The funds will certainly remain in the areas where they are now. The question we must ask is: who in the new structure is to be trustee for the funds—the new area, district, or the hospital? These are the matters about which we intend to have discussions with representatives of the present hospital authorities, including the boards of governors.
We also need to consider the question of maintaining any present limitation on the purposes for which trust funds may be used. Questions may arise, for example, as to whether a fund allows income to be spent solely within the four walls of a named hospital, or is the future integrated health service to be modified so that income is also available for supporting work done outside a particular hospital in the district services.
We appreciate the magnetic effect of a trust fund linked to a particular hospital and its importance, especially if its standing is high locally, nationally, and—in the case of some British hospitals—internationally. These funds supplement National Health Service resources particularly in the research and teaching areas. We will accept whatever methods seem best to sustain this expression of goodwill on the part of the public.
It is important that we realise there is this magnetic effect by certain hospitals which attracts voluntary money. It is something which we do not want to dissipate or remove. To give a domestic example, it was only a few weeks ago that there took place in the Palace of Westminster, due to your very kind assistance, Mr. Speaker, a function to assist the Westminster Hospital. I wanted to attend, but, unfortunately, I could not do so. We have a link between Parliament and the hospital which is very close. It was also my teaching hospital. Although I could not attent. I sent a small donation.
If it were not for the same special relationship between Parliament and this

hospital you might not have felt able to act so generously as you did on this occasion, Mr. Speaker. This is a good domestic example of what responses these hospitals can produce.

Mr. Pavitt: Will my hon. Friend say whether he envisages that the new district committees will take over the functions of the League of Friends and be able to raise funds for special purposes?

Dr. Dunwoody: I would not want to do anything to aid any breaking up of the League of Friends. One of the great virtues of such organisations lies in their voluntary and independent nature. I hope that they will continue to have the same relationships with the hospital services as they have now.
I turn now to the question of the community physician. My hon. Friend the Member for Middleton and Prestwich (Mr. Coe) raised this, and the hon. Member for Farnham (Mr. Maurice Macmillan) expressed the concern that I know a number of medical officers of health feel, particularly about this problem of timing.
Community physician" is a term, increasingly bandied around in professional circles, which no one has yet defined to everyone's satisfaction. The Green Paper applies the term to the corps of medical administrators who will be working in the new health services. The head of this corps in the health area authority, the chief medical administrator, might alternatively be known as the chief community physician. As such he would be a leading figure in the team of officers of the area health authority and his post would be a key one in the whole structure.
These medical administrators would be drawn from the present administrative medical staff of regional hospital boards and from the health departments of local authorities. They would be in a position to survey the pattern of health care and advise the authority on the general aspects of health in its area. They would be involved in the planning and development of medical specialties, in epidemiological studies, and in the collection, analysis and appraisal of the necessary statistical and other information. The chief community physician would be responsible for organising many of the personal health services at present run by the medical officers of health, such as


maternity and child welfare, vaccination and immunisation programmes, the provision of health centres, health education and other preventive work. He would also be involved in arrangements for the school health service, and would work closely with his colleagues in the Health Service and with the general practitioner in his task of making a comprehensive review of the health needs and problems in his community.
The new local authorities will need medical advice and guidance in their services, particularly in the prevention of the spread of infectious diseases, the public health aspects of environmental health, and food safety and hygiene. In some areas there will be port health problems, too. There will be many aspects of local authorities' other services, such as social services and housing which will need advice. For all these functions it is expected that the local authority will look to the community physician of the area.
We hope that there will be a continuing need for a close working relationship between the medical staff of the area health committee and the public health inspectors of local authorities. We shall be discussing in detail with the interests concerned, including local authority associations, the appropriate arrangements for collaboration between authorities on the exchange of staff and services. The responsibilities of the new community physicians are likely, therefore, to include most of those of existing medical officers of health and hospital medical administrators of today, but because these responsibilities are brought together for the first time in years the community physician will have a much greater responsibility for the health of his community.
Medical advances have changed the picture of health in the community for the traditional medical officer of health. Control of outbreaks of infectious disease, although still vitally important, is no longer the time-absorbing task it has been in the past. More attention can now be paid to positive promotion of good health and the treatment and relief of disabilities and chronic illness. A united N.H.S. would provide a framework where development, to meet these new situations could be devised and

answers to the new problems could be worked out. This consideration points to the need for a redefinition of the rôle of the medical administrator, and a clearer picture of his future responsibilities.
It is also suggested in many quarters that traditional training of medical officers of health, and such training as exists for other medical administrators needs to be reviewed afresh under a unified National Health Service. For this reason, my right hon. Friend has set up a working party under the chairmanship of Professor Hunter, Vice-Chancellor of Birmingham University, to consider the functions and training of medical administrators.
I should like now to deal with some of the many points that have been raised. I want, first, to refer to two or three points made by the noble Lord the Member for Hertford (Lord Balniel), who made what I thought was a rather confused speech. It came particularly inappropriately from him to suggest that the Green Paper was in any way woolly. He referred to the Porritt Report. That report was valuable, but it took us only a few steps along the road. We have begun to move forward, as the Green Paper indicates.
The noble Lord said that the detailed control of 90 boards was a tremendous task for the Department to undertake, and that the Green Paper proposals would be harmful to the profession in some way. One also had it, either implied, or spelled out, from other hon. Members that the Department was taking on an impossibly large task. Hon. Members do not realise how complicated the relationship now is between the central Government and the community of local authority based health and welfare organisations. At present my Department has dealings directly with 14 regional hospital boards, 35 boards of governors, 119 executive councils of the National Health Service, and 158 local health authorities in different parts of the country. Indirectly, through the regional hospital boards, it has dealings with 299 hospital management committees. That means that we are dealing with 525 organisations of different kinds in different parts of the country, and to have to deal with only 90 will, in some respects, lighten the load and ease the


burden which the central Department has had to bear for so long.
Another point made by the noble Lord left me, frankly, confused. He laid great emphasis on the need to give much more power to the regions, but at the same time said that he endorsed the area concept, and spoke quite warmly of the district councils and of the existence of the central department as well. That means that under his suggested proposal we would have a central Department with a three-tier structure below it. A bureaucratic hierarchy of such frightening complexity appals me.
The hon. Member also touched on the question of general practitioners in hospitals and the future of cottage hospitals. The right hon. Member for Thirsk and Malton (Mr. Turton) also talked about this from a constituency point of view, as well as from his past experience in this Department. I agree that we have to look at this position taking into account the special local problems, which in rural areas can be very different from those in the more densely populated areas. Certain rural district hospitals may have a continuing rôle, but I utter a word of warning. This rôle will probably be in providing for long-stay patients and cases of that sort which do not make demands on the highly specialised services that others make.
I was not happy about the suggestion that some of these small, isolated hospitals could be converted for maternity use. More and more patients have the advantage of specialised units with all the resources of blood banks and so on which they need at their beck and call. If we are to make use of these small units, there are far more practical ways in which they can be used.

Dr. Winstanley: The Under-Secretary must acknowledge, because he knows perfactly well from his own experience, that the results in terms of neo-natal mortality and morbidity in these small general practitioners units are considerably better than those in large general hospitals.

Dr. Dunwoody: This depends on selection of cases. The most important thing in the use of a general practitioner unit is to select the right cases. If they are selected correctly, it means that the

high risk cases go to the consultant. This is not a criticism of any sort of unit.
The noble Lord the Member for Hertford also put forward an extraordinary suggestion, that the area boards, instead of having the one-third, one-third, one-third breakdown of membership suggested by my right hon. Friend, should have half the membership coming from the professions and half from local authorities. This means that the noble Lord sees no place for representatives of other groups, no place at all for trade unions and voluntary organisations. The whole virtue of the third membership which will still be appointed by my right hon. Friend is that he can take account of such groups as voluntary organisations, trade unions and other valuable members of the community who would never be put forward either by local authorities or the professions. [An HON. MEMBER: "How do you known?"] Because they do not do so now in practice. Yet we know that these are some of the most valuable members of boards and hospital management committees.
My hon. Friend the Member for Huddersfield, West (Mr. Lomas) raised an important point when he spoke about his union's acceptance of the Green Paper. He asked about membership of area authorities in relation to representation of staff working in hospitals. We are looking actively into this question of special representation on area authorities. If we are to have this by some means or other it will probably come within the Secretary of State's third. This point was made also by my hon. Friend the Member for Willesden, West (Mr. Pavitt) and my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding).
The right hon. Member for Reigate (Sir J. Vaughan-Morgan) raised the question about staff which I have already covered to some extent. He asked who would employ and appoint the consultants. This question is still open, and we are actively considering the best solution to the difficulty in consultation with various bodies. He raised a rather similar point with reference to teaching hospitals We are very conscious of the need to involve the universities and teaching hospitals. There is a special consideration with reference to teaching hospitals in regard to consultants.
My hon. Friend the Member for Manchester, Exchange (Mr. Will Griffiths) raised an important point when he talked about how district committees should be formed. He wanted my right hon. Friend to have half the membership decided by election in the community. My right hon. Friend said that this was one of the things he was prepared to consider. I assure my hon. Friend that the point he made will be taken seriously into consideration.
The hon. Member for Cheadle (Dr. Winstanley) talked about the time gap between Seebohm and the Green Paper proposals. I mentioned this in passing when talking about the community physician. The hon. Gentleman also spoke about the division between health and social services. We considered this question very carefully, particularly with regard to social work for the mentally ill and handicapped and home helps. We decided that this sort of social work and home help was predominantly a social service function and should go on that side of the fence, whereas other functions with a predominently medical content better came on our side of the fence.
The hon. Member for Chelsea (Mr. Worsley) raised a number of points about the community services and suggested that social workers in hospital should be transferred to local authorities as soon as Seebohm is implemented. We have not proposed this. We are prepared to listen to the views of those concerned—especially the social workers' own organisations—on timing.
My hon. Friend the Member for Halifax (Dr. Summerskill), who has apologised for being unable to be present, rightly praised the work being done by voluntary organisations, both in her constituency and nationally. This comes back to a point I made earlier. I should not like to see a situation in which the voice of the voluntary organisations was not heard at hospital level, but I fear that this would happen if there were this 50–50 split between the local authorities and the professions, as suggested by an hon. Member opposite.
The hon. Member for Northants, South (Mr. Arthur Jones) raised the question of the reasons for the rejection of the Maud suggestion. This was a very vague suggestion in Maud. Maud did not look

in detail into the health service. We gave very serious consideration to the suggestions that there should be closer links than we are suggesting between health authorities and local authorities. We consulted many bodies—the B.M.A., the paramedical professions, the local authority associations—and, having considered the views which were put forward, I am sure that what we are suggesting is right. There is no sign of a diminution in the position of the professions to the opposition which the hon. Gentleman was expressing—expressing almost to the extent of being in a minority of one in this debate.
My hon. Friend the Member for Newcastle-under-Lyme made a number of points about the general practitioner service. Group practices, health centres, the appointments system—are all very desirable and we want to see much more of them. The cases he cited may well be examples of a group practice or an appointments system not functioning as well as it should. This is something that often can be resolved if the patient talks to the doctor. All too often the patient does not talk to the doctor about the treatment he receives. If my hon. Friend will raise the matter with me, I will look into it.
My hon. Friend the Member for Nuneaton (Mr. Leslie Huckfield) made a number of criticisms of one sort or another about regional hospital boards. In particular, he stressed the need for direct elections and emphasised how we were at the mercy of Ministerial appointments at present. In recent weeks my hon. Friend has himself been appointed as a member of the regional hospital board in the area of his constituency. I am sure that my hon. Friend will take with him to that board the same forceful expression of opinion that he has given the House the advantage of hearing tonight.
I have not been able to answer literally every one of the questions. The hon. Member for Farnham raised a number of points, including some about the community physician, which I have already covered, and about the statutory committee. The statutory committee for the family doctor—the community services, not only doctors and dentists—will bear a similar relationship to that which the executive council bears today.
This has been a useful debate. The Green Paper is an important document.
The National Health Service that served Britain for the last generation was introduced by a previous Labour Government. The debate is a major part of the process of consultation on the second Green Paper. I believe that the eventual outcome of these discussions will be a major policy decision which will determine the type of health service we have for the next generation, and I believe that will be implemented by the next Labour Government.

Question put and agreed to.

Resolved,
That this House takes note of the Green Paper on the Future Structure of the National Health Service.

Orders of the Day — BUSINESS OF THE HOUSE

Ordered,
That the Proceedings on the Export Guarantees and Payments Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Concannon

Orders of the Day — EXPORT GUARANTEES AND PAYMENTS BILL

Not amended (in the Standing Committee), considered.

Mr. Speaker: As is my custom, I have posted the Amendments which I have selected for consideration. The first one is new Clause 1.

New Clause 1

GUARANTEES COVERING PARTS OF CONSIGNMENTS

The Board of Trade in exercising their functions under section 1 of the Export Guarantees Act 1968 (Export Guarantees) may make guarantees covering only part of a consignment of goods, and may make such different charges for different parts of a consignment of goods, as they may with the approval of the Treasury determine.—[Mr. Ridley.]

Brought up, and read the First time.

10.1 p.m.

Mr. Nicholas Ridley: I beg to move, That the Clause be read a Second time.
This Clause touches on a matter which was not raised in Committee, but which I should like to raise now in order to hear the strength of the argument both ways. I admit that it is not an open and shut case, but it is one which was put to me on a recent visit to some industrialists who felt strongly that the policy of the E.C.G.D. was wrong in this particular respect.
The Clause would empower the E.C.G.D. to give guarantees covering only part of a consignment of goods, whereas at present the E.C.G.D. insists on what it calls a comprehensive approach whereby the whole of a firm's exports have to be insured and the exporter cannot identify some parts of his exports, on which he would rather carry the risk himself and allow other parts to be covered by E.C.G.D. This practice results in some odd situations. I admit that unless an export credit guarantee were given, the exporter would not be in a position to obtain 5½ per cent. finance. But even then, as the person who put this matter to me said, nearly the whole of his export business—and he is quite a considerable exporter—was safe business that he did with old and valued customers on the Continent which carried


no risk of any sort and which he had no wish to insure because he did not think the premium was worth it.
On other hand, he had intended to increase his export business by extending his sales to other countries where the creditworthiness was less successful. He had been offered E.C.G.D. guarantees only on condition that the whole of his business, and not just that part which he wished to use as an extension to his activities, was covered by E.C.G.D. This seems to be a deterrent to firms of that sort increasing their exports and, on the face of it, seems undesirable.
I studied the E.C.G.D. document which contains a couple of useful pages on the advantages which it is claimed stem from the comprehensive approach. While I accept those arguments for what they are worth, I must take into account the other side of the question. It seems to me that really risky projects should bear a higher premium than really safe projects. Really safe projects should not be insured at all. The analogy from the normal world of insurance is that if one is a very bad driver one pays a very high premium, or perhaps one does not get insurance cover at all except on the most constrained terms.
It would seem contrary to all domestic practice to insist on insuring all risks at the same rate, whether they be good or bad. I am sure that the Minister will agree that if one tries to insure one's possessions in a house which is open to burglars, one will find it much more difficult than if one has a complicated system of burglar alarms and bars to stop burglars entering. Therefore, it seemed curious on the surface to insist on all projects being brought into the net.
The E.C.G.D. argues this on the basis that unless it can take all the business it will not be able to reduce its rate of premium enough to provide a really cheap service, and does so in the most surprising way. It wants as much business as it can to increase the range of our exports covered by guarantees, which is debatable. It seems to me that the greater the proportion of our exports which could be done without guaranteeing them the more satisfactory the position would be, because it involves a greater volume of cheap credit from the banks, a greater amount of credit out-

standing across the exchanges and, therefore, a worsening of the balance of payments. On the whole, I would think that the best thing was to reduce the quantity of exports covered by E.C.G.D. to the minimum necessary, even if it means charging higher rates.
There is a sort of empire-building feeling about this page of the E.C.G.D. report. Although otherwise I think that it performs an excellent service, it seems to have an ambition to try to take into its account all the export business it can get, whereas if it were more specific and insured only those risks which needed insuring, and charged a higher rate of premium for those risks which required it, it would be extending more of the sort of service many exporters want.
The selective approach, which I am rather tentatively putting forward so as to hear what the hon. Lady says, is embodied in Clause 3, under which only selected projects can be given special help and the amount of the help is to be levelled to that available from competing countries. Here is an example of selectivity in the use of export credits. The Clause raises the whole question of selectivity. There is something to be said for moving to a slightly more selective basis in deciding the premium for various consignments of exports and deciding to allow only part of a firm's export effort to be covered by E.C.G.D. as opposed to the whole of it.
I should be grateful if the hon. Lady would put the arguments as she sees them. Perhaps she will agree with me, but I rather doubt it. I have studied the E.C.G.D.'s case against our proposal as set out on page 20 of its booklet, and I find it rather unconvincing. I hope that the Minister can adduce slightly more powerful reasons against the Clause if she wishes to resist it than those on which the E.C.G.D. has so far rested its case.

10.8 p.m.

The Parliamentary Secretary to the Board of Trade (Mrs. Gwyneth Dunwoody): I would not like to disappoint the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), and, therefore, I must tell him firmly that I do not agree with him. Apart from anything else, the Clause does not add anything to E.C.G.D.'s powers under the 1968 Act, which already enables it to cover all or part of an export contract


or of an individual consignment if it wishes to do so. It is difficult to envisage circumstances in which an exporter would wish to insure only part of a consignment to a buyer, even though I listened to the hon. Gentleman's argument with great attention.
One possibility might be that some goods were being sold on short credit and the rest of the consignment was being sold on long credit terms. As a matter of policy, the Department is not normally prepared to let an exporter offer for insurance only a part of a contract or consignment, because this would leave him free to insure only the riskier elements of his business.
Coming from an hon. Gentleman who has argued throughout the Committee stage of the Bill that we must insist on commercial principles, some of the hon. Gentleman's arguments on the Clause were rather surprising to me. To allow such selection would run counter to the commercial insurance principles on which E.C.G.D. operates, and operates so successfully. E.C.G.D., in practice, operates on the basic concept of whole turnover, and spread of risk, which have been fundamental to the success of the credit insurance scheme. They have enabled the E.C.G.D. to cut its premium charges, and cut them quite dramatically. To allow exporters to select to insure only the bad risks for cover would inevitably lead to higher premiums all round. It would be detrimental to the general body of policy holders and, therefore, harmful to our exports.
The Clause seeks also to give the E.C.G.D. specific power to make different charges for parts of a consignment. But the 1968 Act says nothing about the way in which the E.C.G.D. may make its charges, and it is already free to make different charges if it wishes. In practice, for business insured under its whole turnover policies, the Department will always charge a uniform premium rate for the whole of a contract, but for capital goods exports underwritten specifically the rate of premium may vary for the different components of the contract price if they are on different terms—for example, if local casts overseas are to be paid for on shorter terms than have been agreed for the United Kingdom goods. But the E.C.G.D. has not

encountered any need to make different charges for different parts of one consignment.
If the hon. Gentleman knows of a case in which hardship has been suffered by an exporter, I suggest that he should give me details of it, but I must say to him that, since the E.C.G.D. has been very successful not only in cutting its rates and providing precisely the sort of insurance cover that exporters are very much in need of, I hope that he will withdraw the Motion, because the Clause would not do what he seeks and would not improve the Bill in any way.

Mr. Ridley: I do not think that the hon. Lady gave a very helpful reply. The commercial thing to do is to charge a premium in accordance with risk. If she accuses me of making non-commercial noises I rebut it entirely because, the more the risk, the higher the premium should be. That is the normal way in which insurance business is conducted. For example, if the hon. Lady has a bad driving record she will have to pay more for her driving insurance than if she has a good one. That is the commercial thing to do. It is not commercial to penalise really safe contracts by a higher premium than would otherwise be necessary and to subsidise really risky contracts by a lower premium than would otherwise be necessary.
I must rebut the hon. Lady's suggestion that what I am putting is noncommercial. I gave her an instance of a firm suffering as a result of this policy. I think that it cannot be a very common occurrence, although I do not know, since I am not able to get the evidence from the E.C.G.D., but I will ask my informant for his permission to put the circumstances to the hon. Lady because he was being discouraged from increasing his export effort in that he did not want to have to bring the E.C.G.D. premia to bear on the 90 per cent. of his exports which he considered perfectly safe.
I think that the hon. Lady's argument is weak in the respect that all exporters who consider that they can manage without the E.C.G.D. escape having to pay any premium at all, to the obvious detriment of those who have to incur premia by insuring with the Department. The net is, therefore, already full of holes. But it seems to me that the more holes in the net the better, because this is not


a case of trying to push everyone into the E.C.G.D.'s cover but of trying to identify where the help is needed and of the E.C.G.D. being more specific and more flexible.
I will withdraw the Motion because the argument is not conclusive either way, but I hope that the hon. Lady will ponder a little more carefully on what I have said and on the commercial rightness of my argument, because it is clear that perhaps this blanket approach of the Department is rather non-commercial and may be due for a change of attitude. I hope that the hon. Lady will look at this matter again, because her argument against my case was not as strong as she thought. I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

Clause 3

POWER OF BOARD OF TRADE TO MAKE GRANTS FOR THE PURPOSE OF REDUC-ING COSTS TO OVERSEAS PARTIES TO EXPORT CONTRACTS OR CONTRACTS RELATED THERETO

10.15 p.m.

Mr. John Nott: I beg to move Amendment No. 1, in page 2, line 33, at end insert:
Provided that it does not apply to contracts for the sale of arms.
I do not intend to go into a long inquiry, as we did in Committee, into the question of how our premiums have either risen or fallen on arms sales over the past few years. We had problems in trying to understand the accounts. Due to the kindness of the Department, these problems were explained to me after the Committee and I now understand how the accounts for arms sales are drawn up. Clause 3 is, or may be, concerned with subsidised interest rates. The purpose of the Amendment is to ask whether it is the Government's intention to subsidise interest rates in cases where this country or a private firm is selling arms overseas.
On Second Reading and in Committee there was discussion about the wisdom of the Government in inserting Clause 3, and whether the Clause, which allows E.C.G.D. to subsidise interest rates, could not lead to an interest rate war between one country and another. The President

of the Board of Trade was sympathetic to the problems which could arise if this country were to indulge in a credit race with interest rates, or by the lengthening of credit, and the Berne Agreement was mentioned. We on this side feel some hesitation about Clause 3, because this country, more than any other, depends upon trade for its prosperity and livelihood, and it cannot be in the interests of the country——

Mr. Speaker: Order. Clause 3 is in the Bill. We are not discussing whether Clause 3 stand part of the Bill. The hon. Member must come to his Amendment.

Mr. Nott: With respect, Mr. Speaker, I am referring to the question of subsidised interest rates, which is what Clause 3 is about.

Mr. Speaker: I hesitate to bandy words with an hon. Member, but the hon. Member is moving an Amendment to Clause 3. Clause 3 is in the Bill.

Mr. Nott: With respect to my Amendment, I am referring to the question of arms guarantees and whether or not they should be subsidised under the provision of Clause 3. If I take my hon. Friend's attitude to this attitude correctly, we have some reluctance about Clause 3 generally, but we have particular reluctance about the Government allowing interest rate subsidy for arms sales abroad. That is my first point, on which I would like the hon. Lady to comment.
My second point refers to comments made in Committee by the hon. Lady which relate to this Amendment. The hon. Lady was challenged about whether Clause 3 applied to commercial business. We were discussing the distinction between commercial business and national interest business. My hon. Friend the Member for Horsham (Mr. Hordern) asked the hon. Lady:
Should not that term 'commercial' be inserted in the Bill?
The hon. Lady replied:
I think not. It is clear in the wording of the Bill as it stands.
To which my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) replied:
It is not."—[OFFICIAL REPORT, Standing Committee G, 3rd March, 1970; c. 48.]


The Bill says
for the purpose of reducing costs".
It does not say anything about "commercial". I was under the impression, as we all were in Committee, that arms sales came under the special guarantee business; in other words, not under the commercial business as defined but under the so-called national interest category. From the accounts, I believe that arms sales come under the special guarantee business, which is normally defined as national interest business and not as commercial business.
May I ask the hon. Lady, with reference to this Amendment, whether she is saying that the sale of arms abroad is commercial business, or whether it is national interest business and is published in the accounts under the special guarantee business? Is it right that E.C.G.D. should be given the power to indulge in an interest rate war when it comes to the sale of arms and, secondly, can she clarify this point about commercial as opposed to national interest and special guarantee business?

Mrs. Gwyneth Dunwoody: I have already attempted in Committee unsuccessfully it seems, to allay the suspicions of hon. Members opposite about the use of E.C.G.D.s powers to assist sales of arms. I have also sought to explain that the new powers bestowed by Clause 3 of the Bill will be used very sparingly and only where there is foreign competition for valuable overseas business on terms which cannot be matched under E.C.G.D.s present powers.
If hon. Members are concerned about the use of E.C.G.D.s new powers to support a vast amount of arms business, I can assure them that we have not so far identified any instances of foreign competition on credit-mixte terms for arms contracts. Unless and until we do discover such instances the question of using these powers in connection with arms sales will not arise.
I take the point made by the hon. Member for St. Ives (Mr. Nott) that we are anxious, and he is right when he says that the President of the Board of Trade agrees with him on this, that we should not find ourselves involved in a credit race. We explored this point widely in Committee. It is obvious that

this must be done by international agreement. I pointed out that the occasions when this Clause would be used for anything like arms sales would be very rare. I tried to assure the hon. Gentleman on that point.
We had a considerable discussion about the word "commercial" which does not appear in the 1968 Act or in the Bill. Nevertheless, the grant-making powers in Clause 3 will he used only where there is good commercial advantage to be obtained to Britain in winning business. This relates to the situation which may arise when a contract may lead to further export orders. If there were a question of a contract continuing and bringing with it further orders, we would obviously be prepared to consider that. The answer about the word "commercial" in Clause 3——

Mr. Speaker: Order. The debate about what took place in Committee is over. The hon. Lady must come to the Amendment which is:
Provided that it does not apply to contracts for the sale of arms".

Mrs. Dunwoody: I apologise.
We have endeavoured to reassure hon. Gentlemen opposite that we have not so far identified any particular case in which credit-mixte could possibly be used for arms sales, and we feel that such fears are unjustified.

Mr. Ridley: I take it from her reply that the hon. Lady intends to accept the Amendment. She has been loud in her protestations that she has not identified any case in which arms sales could or should have been subsidised under Clause 3. She says that she does not intend to use Clause 3, except for the most lucrative of business, and that she could not envisage a situation where she would be trying to "flog" British arms cheaply and would need to use Clause 3.
The hon. Lady is very sensitive about this. She attempted to get out of it in Committee by saying that arms sales were things like telecommunications equipment and all sort of things which would be in our commercial interest. Very well; let telecommunications equipment and all sorts of things go under Clause 3 and we shall not challenge it, but the Amendment relates to arms, and there is


little connection between telecommunications equipment and arms.
What my hon. Friends feel is that, although we are in favour of arms sales all round the world, except to our enemies, there is no point in subsidising them. This business should not be taken at a subsidised rate. The idea of, perhaps, our engaging in a subsidised credit race with the French, Britain selling cheaper and cheaper arms to the Nigerians and the French selling cheaper and cheaper arms to the Biafrans, is the sort of absurd pickle into which this Government might easily get themselves—indeed, I should not be a bit surprised if they had got themselves into it in the past few months—but the hon. Lady could stop all this speculation by accepting the Amendment.
The hon. Lady says that she can think of no business which would have occurred dealing with arms and she does not expect any to come. So why not

accept the Amendment? It would be the simple and logical thing to do. It would take this difficult decision out of the discretion of the civil servants who administer the E.C.G.D. This is a major political decision. It should not be left to people in the E.C.G.D. to decide whether to subsidise a consignment of arms to go to someone who may well be a "dicky" risk financially. Countries at war very often are. I do not like the idea of leaving to them a decision in a matter like this.
It would be only fitting, if the hon. Lady wants to use Clause 3, that she should deny herself the use of the Clause for the supply of arms since arms can be supplied under Section 2 of the original Act without difficulty. I look forward, therefore, to hearing her say that she will accept the Amendment, for the reasons which she and I have given.

Amendment negatived.

Mr. Kenneth Baker: I beg to move Amendment No. 2, in page 2, line 39, after 'contracts', insert 'such'.

Mr. Speaker: I suggest that we take, at the same time, Amendment No. 3, in page 2, line 40, leave out from 'Parliament' to end of line 42 and insert—
'as in the opinion of the Board of Trade, with the approval of the Treasury, are not detrimental to the United Kingdom in the matter of its balance of payments'.

Mr. Baker: As the House will have noted, the material Amendment is No. 3. Under Clause 2, the Government have taken to themselves power to extend, for the first time, what is known as buyer's credit. In other words, they can lend to a businessman in South America money to buy British goods. Under Clause 3, the Government are given power also to make loans for these transactions. They can lend money to an overseas businessman to buy British goods, and they can do it at a subsidised rate of interest. If they lend money to a businessman in Chile to buy British, they can lend at 10 per cent., 8 per cent., 5 per cent., 3 per cent., or no interest at all.
This policy could be summed up in four words—"Soft loans for foreigners". I dare say that the hon. Lady will not describe it in those terms in her election address, for otherwise the good citizens of Exeter would ask, "Why not soft loans for house buyers and newly-weds in Exeter?".
We are concerned that the powers which the Government have taken to give soft loans are too wide, and the purpose of Amendment No. 3 is to apply a sensible limit. Under Clause 3 unamended, the rate of interest could be any figure at all. It could even be negative interest. If the true commercial rate of interest were 10 per cent., the Government could say 0 per cent. or even give a discount below 0 per cent. We think that this is undesirable.
There is no estimate in the Bill of the amount which will be spent for this purpose, but it could literally be limitless. When the businessmen around the world wake up to the fact that the British Government will use British taxpayers' money to provide them with soft loans, I believe that the queue for soft loans overseas will be endless. Therefore, we seek to impose

upon the Government a duty to show that there is a clear case to be made out that it is of benefit to our balance of payments.
The basic fallacy behind the credit race is that export sales are such good things they should be promoted and supported at any cost. This is obviously a fallacy, because sales at any cost are not good. Only sales that are profitable in the widest context are good—profitable to the nation as well as to the British manufacturer and the supplier of the goods.
Is it profitable to the nation to subsidise overseas sales in this way? Does our balance of payments really benefit? We believe that the case has still to be made out. A full cost-benefit analysis of the Government's case is needed. On certain matters the Government have been very forthcoming in producing cost-benefit analyses. The choice of the third London airport is a good example. We would like to see that principle extended to justifying the case for soft loans for foreigners. It is not made out by saying that it is in the national interest, and that if we do not do this the French, the German, or the Canadian Government will do it. To join the Gadarene rush seems to be a weak argument.
For example, if a loan of £1 million is made to a businessman in Chile to buy British goods, what will happen? He will borrow the money to pay for the goods. The actual monetary transfer in the reserves is nil, but the reserves will benefit by the repayment of that £1 million from Chile over the next five or 10 years. Is this the best way of spending £1 million overseas? I doubt it. I think that there would be a much better return to the United Kingdom's balance of payments if that £1 million, instead of being lent for trade, was invested overseas and was actually growing rather than depreciating in value.
Until this has been properly worked out by a discounted cash flow exercise, taking into account the prevailing exchange rate, the risk of devaluation in the recipient country, the rate of interest and the period that the loan is outstanding, we cannot say whether operations of this kind will benefit our balance of payments.
Because we are doubtful we think it right to seek to impose upon the Govern-


ment and upon the E.C.G.D. an obligation to show that we are net beneficiaries.
I repeat, the whole fallacy behind Clause 3 is that sales of goods overseas are so valuable that we must bend over backwards in subsidising them. We believe that this is very short-sighted indeed. The hon. Lady, in our opinion, did not make out a good case in Committee. We invite her to prove tonight that it is to the benefit of our balance of payments.

Mr. Ridley: I agree with and should like to reinforce every word of my hon. Friend's excellent speech.
The words of the Amendment are taken from the Industrial Development (Ships) Act of this Session, which, no doubt, the hon. Lady will have studied with care. The Treasury—that all-wise body—assumed that it understood entirely what was in the interests of our balance of payments and, in that Act, provided a long and detailed memorandum on whether the purchase of a ship abroad, under a whole variety of different circumstances, was or was not in the interests of our balance of payments.
I have the memorandum with me. It goes into great detail about discounting cash flow and whether or not to remit profits overseas, and so on. Although some of the assumptions made in the memorandum are a little tenuous, it is clear that the Treasury is now able to say whether or not a certain transaction is in the interests of our balance of payments. The hon. Lady in Committee went so far as to confirm it:
However, hon. Members can be assured that the calculations, involving the use of techniques of discounting future payments at present values, are carried through meticulously. The effect of these calculations can be seen in the terms supported for individual contracts, so that, after the event, hon. Members will be able to determine whether the Department is using its powers reasonably."—[OFFICIAL REPORT, Standing Committee G, 5th March, 1970; c. 59]
We now have it that the Government are able with their slide rules and log tables to work out precisely whether a contract is in the interests of our balance ct payments, taking into account the risks of devaluation, the risks of changes in reserves, the risks of an alteration in the balance of payments situation and the currency values throughout the country for, say, seven years ahead. If they have

this wisdom, let them be required to use it. But before they indulge in subsidising exports through the Clause it would be nice to know that they are doing so if, in their opinion, it is to the benefit of the balance of payments.
I do not believe that there is any real resistance in the Government to this Amendment. But I suppose they will oppose it out of pique because they did not think of it themselves. The hon. Lady has tried hard to make out that she intends to use the Clause only in a commercial manner, so she will have no difficulty in accepting that it should be used only when it is in our interests to do so.
I suspect that these powers will be used from time to time far beyond what, in fact, is in the commercial interests of the country, namely, to chase business just for the sake of prestige—to be able to say that we have such-and-such a contract even though we will make a thumping loss on it. We already have £370 million of E.C.G.D. credit outstanding across the exchanges and there is no point in increasing that more than we have to in order to secure exports. In the present balance of payments situation, it is not worth picking up business of marginal value by means of a heavy subsidy on the credit terms.
The hon. Lady throughout has shown no understanding of the fact that times have changed since the most desperate days of the Labour Government, when they were scratching round borrowing money through the Gas Council and from the Germans for any conceivable prop they could find to bolster up a tottering balance of payments. That era has passed away, probably only temporarily. We have got to the stage where the hon. Lady does not have to buy her exports quite so dear. Therefore, we must put a little bit of a stiffener into the Clause. The concept of projects which are for the benefit of the balance of payments should be acceptable to the hon. Lady as well as to us.
I hope that the hon. Lady will have the kindness to accept this Amendment, which meets the strong and legitimate criticisms which we have been putting from this side of the House.

Mrs. Gwyneth Dunwoody: If I accept or reject any of the Amendments in the name of the hon. Member for Cirencester


and Tewkesbury (Mr. Ridley), it is certainly not from pique. He fills me with great affection, because he resembles ever more Catweazle, the magician from medieval times who suddenly found himself catapulted into the 20th century.
It is rather entertaining that the hon. Member should accuse us of not being aware exactly of what is going on, although he and his hon. Friend have been rather judicious this evening in their choice of words, having entertained us with a very fascinating argument—saying, in effect, "Really, you are not doing well in direct exports, but if you are doing well in direct exports we shall not give you any credit for it. We shall say that you should change the methods by which you have obtained these successful balance of payments and should instantly start doing something else altogether, which would push us back into the situation in which we left you when we went out of office."
Hon. Members opposite have been extremely careful not to say, in public—and they have moderated their tone this evening—that they were not prepared to give British businessmen, or the British Government, or the British people in general, any credit for the excellent balance of payments situation. I thought that their Amendments in Committee were not tremendously helpful.
It is not necessary to instruct these Departments to have regard to the effect on the balance of payments of any decision to use the new powers. I have already made clear that these powers will be used only to match foreign competition in relation to desirable export business. By "desirable" I mean beneficial to the United Kingdom balance of payments, not necessarily the particular contract in question, but, in some cases, possibly from other contracts which it is expected would flow from it.
The proposed Amendment would also remove from this Clause the requirement that the Treasury must approve the amount of any grant, the way in which it shall be made and the terms upon which it may be made. These practical provisions are a more effective control than that proposed by the Amendment and I cannot accept that they should be deleted from the Bill.
The hon. Member for Cirencester and Tewkesbury has made great play of the fact that he has lifted the Amendment almost word for word from the Government's Bill. It is nice to have him pay that compliment to the Government, even if it was in such a roundabout way. It is time that the wording of the Amendment is based on a formula taken from the Industrial Development (Ships) Act, 1970. This Act restricted the powers of the Minister of Technology to make investment grants under the Industrial Development Act, 1966, in the special case of ships. When the Treasury thinks that the payment of an investment grant for a ship would
operate to the detriment of the United Kingdom in the matter of its balance of payments
it may instruct the Minister of Technology not to grant it. In this context the "balance of payments test" is, as has been explained, simply whether the expected financing and operation of the particular ship will have a plus or minus effect on the United Kingdom's foreign exchange position.
Such a test is not applicable to the powers defined in Clause 3. These relate exclusively to export credit. The deferred payments for exports are by definition a plus item for the United Kingdom's foreign exchange position even if they come later than from exports sold on cash terms. The Amendment would thus have no effect on the use of the powers.
I hope that the House will reject the Amendment and that hon. Members opposite, before the Bill has been dealt with finally, will get up and pay tribute not only to the work done by the E.C.G.D.—which, by definition, they have criticised tonight on more than one occasion—but also the excellent job done by the Government in presenting such a comfortable and encouraging picture of our balance of payments.

Mr. Tom Boardman: I had not intended to intervene until I heard what the hon. Lady had to say. I was deprived of the privilege of listening to the debates in Committee, but the hon. Lady said one or two things that brought me to my feet. She said, first, that hon. Members on this side of the House had denigrated the achievements of the Government and industry. It was quite unfair of her to bracket the Government and industry in that way.


Throughout our debates my hon. Friends have congratulated industry on its great achievements, which have been brought about despite the Government.
The hon. Lady also referred to the suggestion that the Government would always apply commercial considerations not just to a contract, but in terms of the global picture. She said that we will sub-sidise or allow loans or guarantees at favourable terms, taking into account the consequences of what might happen in future. My hon. Friend was pointing out the dangers of this, and saying that it allowed the money to run away. The hon. Lady referred, perhaps indirectly, to the commercial wisdom which we can expect to receive from the Government. Those of us who have tried, particularly, in recent weeks, in the case of Beagle Aircraft, to examine the Government's commercial wisdom must feel very nervous about its application to any of these aspects of industry and commerce. support the Amendments.

10.45 p.m.

Mr. Kenneth Baker: We cannot possibly be satisfied with the reply of the hon. Lady. She cast my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) in the rôle of Catweazle. The only figure from fairy tale and mythology whose rôle she assumes tonight is Humpty Dumpty—or rather Humpta Dumpta—who said that, if he went on saying a thing long enough, it eventually became true.

Mrs. Dunwoody: I do not mind the hon. Gentleman criticising my politics, but I wish that he would lay off my figure.

Mr. Baker: I would not be so ungallant as to mention that.
The hon. Lady asserted again this evening that soft loans for foreigners must be in the national interest, because they brought sales of British goods, which are, therefore, good for the balance of payments, so soft loans must be good. That was her Socratic reasoning. But this is merely a series of assertions. It does not follow that all sales of British goods are good for the balance of payments. It depends whether they are profitable for the supplier and for the nation as a whole. If we extend soft loans for buying British goods, we may get a short term benefit for the balance of payments,

but this may not be the best way to spend that sort of money.
It may be much better to lend long instead of short, so that the money may fructify over the years. Today, a set sum will be lent to an overseas businessman who will pay it back in instalments over the years. Allowing for the depreciation of money, its value will be much less when it does come back. If that same money were lent and invested in the overseas country, it would grow and would be much larger when it was paid back. This is why there should be a proper cost-benefit analysis of operations of this sort.
The Board of Trade has shown itself progressive and receptive to this kind of analysis in other matters of policy, but they have a mental blockage on this one, because they have been told that it must be good for the balance of payments. Tomorrow, the German Government or the French Government might announce much better credit terms, which would undercut this policy, and the next day we should have to offer even more generous terms. In this rush for soft money across the exchanges, we would suffer immeasurably at the end of the road.

Amendment negatived.

Mr. Nott: I beg to move Amendment No. 4, in page 2, line 42, at end insert:
(3) In any cases when the powers conferred on the Board of Trade by subsection (2) above have been used in the promotion of the sale of armaments overseas, the Board shall make a separate return to Parliament setting out the sums involved and the destination of all arms exports promoted by the use of these powers.
Unlike the hon. Lady, I do not regard my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) with great affection—the term she used, I think—but I do regard him with considerable respect. I thought that his speech on the first Amendment was admirable. All I want to say of this Amendment is that as the hon. Lady could not foresee circumstances in which the E.C.G.D. would specially subsidise interest rates for the sale of arms abroad, but, nevertheless, requires powers to do so, she has now got her powers. That Amendment was rejected. Would she, instead, like to tell Parliament what she has done about the sale of arms under the Clause after she has done it?

Mrs. Gwyneth Dunwoody: I have explained in Committee the very real objections there are to the disclosure of details of commercial contracts which would be involved in any return showing the sums and export markets involved in sales abroad supported by E.C.G.D. grants under this Clause.
I understand the concern which is felt by hon. Members opposite about the possibility of large sales of arms being supported by E.C.G.D. grants, particularly under Clause 3. But what I have said already should have reassured hon. Members that not only will E.C.G.D. grants not be used to support uneconomic business, but that these new powers will only be used to match foreign competition on credit-mixte terms. We have not so far identified any instances of credit-mixte terms being offered for arms sales, and unless and until we do discover such instances the question of using the Clause 3 powers will not arise.
However, as Easter is rapidly approaching and I am desirous of making hon. Members opposite a small gift to show that there is no ill will, and as, particularly, we have absolutely nothing to hide, I should like to provide hon. Members with more information. The E.C.G.D. annual appropriation accounts will show each year the total amount of grants given under these new powers, and I am proposing that they should be annotated to show the total value of grants, if any, which have been made in relation to arms contracts. This would be an aggregate figure and would not, of course, give any details of individual grants.
But I am sure that hon. Members opposite are not so ungallant, in spite of their remarks, as to look any gift horse too closely in the mouth.

Mr. Ridley: After many hours of debate on this subject, I am delighted to hear that the hon. Lady is at last to publish full details of the use of powers under the Clause. Indeed, I feel that Catweazle can almost return the great affection on finding that all his pleadings have not gone unheard. It is a tribute, and a matter of some pleasure to my

hon. Friends, that the rather unsympathetic, but, I think, entirely genuine points which we have been trying to make in most courteous fashion throughout the passage of the Bill should have, at the very eleventh hour, received some recognition from the Government. This will be a great help. We should keep public control over the use of the powers under this Clause, not only in general but also on the particular issue of the sale of armaments which has been troubling my hon. Friends.
I am grateful that the hon. Lady should have given that undertaking. Had it been made at the beginning of the Committee stage, it might have saved one morning and, perhaps, a little time this evening as well. So I thank her. She has made a useful concession. If this were to be my last word on the Bill I would just repeat the tribute I paid to the E.C.G.D. on Second Reading for the way in which it has handled our business. If we have made criticisms, they have been constructive criticisms, and our remarks have, in the main, been about the future and not about the past.
I add my tribute to industry for the magnificent way in which it has increased exports despite the ham-fisted attempts by the Government to hold them back. We wish E.C.G.D. well. We are grateful to the hon. Lady for having met us on this very important point and we hope that the Bill will be some small help towards increasing our export trade in years to come.

Mr. Deputy Speaker (Mr. Sydney Irving): I understand that although the hon. Lady has given an undertaking, she has not accepted the Amendment.

Mr. Nott: I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 55 (Third Reading), and agreed to.

Bill accordingly read the Third time, and passed.

DOCKS AND HARBOURS (VALUATION)

Motion made, and Question proposed,

That the Docks and Harbours (Valuation) Order 1970, a copy of which was laid before this House on 4th March, be approved.—[Mr. Freeson.]

10.56 p.m.

Mr. Graham Page: I think that at least we should have an explanation of this Order. It is most discourteous to the House to present an Order of this importance without some explanation. The Parliamentary Secretary will have to accept an explanation from me at some length under those circumstances.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Reginald Freeson): I have no doubt that I shall not be able to stop the hon. Member for Crosby (Mr. Graham Page) in full flight, but I do not need an explanation from him. I am aware of the background to the Order.

Mr. Graham Page: The hon. Gentleman may not need an explanation, but the House and the public need an explanation. This Order the Government themselves bring before the the House for affirmative Resolution. It is not a Prayer by the Opposition. The Government have a duty to the country and to the House to explain the Order. If the hon. Gentleman will not do so I shall have to do so at some length.
The parent Statute for this Order was passed as long ago as 1961—[Laughter.] The hon. Gentleman need not laugh at this. The Order needs an affirmative Resolution. I should have thought it right to explain it to the House. It is something new. There is no precedent for the Order, although it is based on a statute of 1961. Negotiations have been going on for a long time to produce an Order which the hon. Gentleman puts before the House merely by quoting its title.
I have some split loyalties over this Order because my constituency contains part of Liverpool docks, and a very important part where a £39 million dock is being built. It is important to the local authority that it should receive a proper rate for those docks. It is also

important to the Mersey Docks and Harbour Board, the owners of the dock, that the board should pay proper rates and not too much by any wrong formula which may be contained in new Statutory Instruments. It is particularly important to Liverpool because Liverpool, with London and Manchester provide about 45 per cent. of the gross revenue collected by docks.
This Statutory Instrument is being made under the parent Statute, the Rating and Valuation Act, 1961, Section 3 of which was consolidated in Section 35 of the General Rate Act, 1967. By that Section
The Minister may by order make provision for determining the rateable value of hereditaments to which this section applies … by such method as may be so specified.
The hereditaments to which the Section applies include, under subsection (2)(c)
any hereditament occupied by the persons carrying on, under authority conferred by or under any enactment, a dock or harbour undertaking".
It is with reference to that paragraph that the Order is made.
Section 35 of the 1967 Act is a repetition of Section 3 of the Rating and Valuation Act, 1961. Up to 1961, and, indeed, thereafter until this Order takes effect, docks and harbours have to be valued for the purpose of rates as any other public utility undertaking, namely, on a profits basis. That was decided to be the position by a case in 1961—British Transport Commission v. Hingley.
The profits basis is calculated by subtracting from the gross receipts of a dock undertaking the working expenses, the tenant's share of profits, the cost of maintenance and insurance, and a sinking fund for ultimate renewal. The result obtained from that calculation is the net annual value, to which the rate poundage is applied and the rates collected by the local authority.
That has resulted in the course of time in some rather Gilbertian situations. In a case as long ago as 1873—the Mersey Docks and Harbour Board v. Liverpool Overseers—the board by Statute was bound to devote all its receipts to working expenses, maintenance and interest on a date; and therefore, being bound by Statute to apply all the surplus receipts to those objects, there were no profits left to be rated.
A later case—Port of London Authority v. Orsett Union—in 1920, put that partially right by saying in effect that sterility in earning profits effects value, but sterility in disposing of those profits does not affect value. In the Orsett Union case, although the surplus revenue had to be spent on improvements in the port, it was still held that there was a profit which could be rated.
So, therefore, there was an uncertainty in the law which it was desired to remedy as long ago as the 1961 Act. The Mersey Docks and Harbour Board v. Liverpool Overseers case raised two other anomalies in the law. First, there was the question whether a dock should be valued as a whole estate or separately on what was called a parochial earnings basis. In the Liverpool case the parochial principle, it was said, must apply whenever possible; and only if it were not possible to apply the parochial principle of assessing each dock on its earnings was the estate basis or acreage basis, as it was called, applied. The second of those two anomalies raised by the Liverpool case was that buildings connected with the docks should be separately rated, but that rule was overruled by a later case in 1955 of Clayton v. British Transport Commission.
I have mentioned those cases to show that at the time when the Rating and Valuation Act was passed by Parliament there were grave uncertainties in the law and it was desirable that Parliament should try to find a formula which would remove those uncertainties. It was right and proper at that time to make provision for them to be resolved, but at the same time it was not desired to change the actual liability for rates.
I should like to quote from the debates of the time when Section 3 of the Rating and Valuation Bill, 1961 was passing through the House. I refer to the OFFICIAL REPORT of 10th May, 1961, in which we find that the then Minister of Housing and Local Government, Mr. Henry Brooke, said:
Here let me emphasise, what I said repeatedly in Standing Committee, that this Clause is not designed either to increase or diminish the overall liability to rates. That overall liability will be left substantially unchanged. The only question is whether a valuation can better be done by a formula than on the basis of the profits method. That applies throughout.

The hon. Gentleman who was leading for the Opposition at the time, the then hon. and learned Member for Kettering, Mr. Gilbert Mitchison, referred to something which the Minister had said in Committee, and he quoted the Minister in these words:
if it were understood that the new formula was designed not to make any material change upwards or downwards in the amount of rates payable but rather to produce a more satisfactory and simple method of arriving at assessments '.
He then went on to say:
After what he has already said, I feel sure that the right hon. Gentleman will be able to confirm that those conditions for the use of the powers under this Clause will still apply …
Indeed, the Minister did confirm that in reply, as reported at column 449, when he said:
I cannot guarantee that it would leave the rateable value of every individual hereditament unchanged, but the formula would not be acceptable to the Government if it made any substantial upward or downward change in the rateable value of a class of undertakings."—[OFFICIAL REPORT, 10th May, 1961; Vol. 640, cc. 442–9.1
The intention of Section 3 of the Act of 1961, which is now Section 35 of the Act of 1967, was that it should remove the anomalies and uncertainties in the law without necessarily changing the liability to rates.
The Act of 1961 was followed by the Ministry of Housing and Local Government setting up a Working Party on Rating and Valuation, which started its work in 1963; and this is directly relevant to this Order because now, seven or eight years after that working party started, we see its one statutory effort. Nothing seems to have been produced by the working party until in 1968 the Dock and Harbour Authorities Association was asked by the working party to try to devise a formula based on revenue from the docks, that revenue to be the basis of rating.
The association tried to devise a formula, but failed to produce agreement on it. I understand that it was then that the Ministry of Housing and Local Government decided that the profits basis could not continue. In particular, it pointed to Port Talbot, where the profits basis produced what was thought to be far too high a rateable liability. It also pointed to 39 ports in respect of which there was a nil assessment to rates. So the profits


basis was obviously unsatisfactory, although over the whole country it was producing about £3⅓million.
As a result of deciding that the profits basis could not continue, the Ministry in October, 1969, produced its own formula based on gross receipts, and last November held a meeting of all concerned—the docks authorities, the transport authorities and the local authority associations—in an effort to obtain agreement on a new basis of rating the docks and harbours. I understand that nothing final came out of that meeting. So we have before us an Order which is something of a pilot scheme relating only to one dock, Port Talbot, as a sort of test of this scheme of rating on the basis of gross receipts.
It is true that the Order nowhere mentions that it refers only to Port Talbot, but one discovers that in Article 2(a), where the Order is said to apply only to
a dock or harbour undertaking at which a jetty provided for the accommodation of iron ore carriers of 100,000 tons deadweight fully laden is capable of being used for the discharge of such carriers not later than 30th September 1970,".
So, after about 8½ years of attempts to find a formula, we have merely a pilot scheme referring to one particular dock. I am in no way blaming the Ministry, for it has made great efforts to obtain agreement between all the parties concerned.
In this pilot scheme, the percentage taken as the rateable value of the dock is a percentage of the gross receipts—7½ per cent. I understand that, taking a cross-section of docks and harbours, the total rateable value on a profits basis is 5·23 per cent. of total gross receipts. If that is the average over a cross-section, I ask the Minister to explain the reason for taking the figure of 7½ per cent.
The intention of Section 3 of the 1961 Act and of Section 35 of the 1967 Act was to tidy up the law, but not to alter the liability. On the Ministry's own figures, the average, taken over a representative number of docks, is 5·23 per cent. yet in this Order, applying to Port Talbot only, the figure of 7½ per cent. has been chosen. There may be some very good reason for it but it does not appear in the Order, and it is feared by both local authorities and dock undertakings that the 7½ per cent. may be used as a precedent when we move on from this

pilot Order to one which is to apply to all docks and harbours.
Perhaps I should put the question now. Is it intended in due course to bring in an Order of this sort applying to all docks and harbours—all 111 of them—and, if so, when?
I turn now to considering whether the gross receipts formula is satisfactory. The formula means that one takes all the revenue of a dock undertaking and finds the figure of 7½ per cent. of that revenue; that figure is the net annual value upon which rates are charged. But gross receipts from dock undertakings differ from dock to dock, not only in amount but in the sources from which they come. The Order changes the amount for which Port Talbot is liable very considerably.
The gross receipts at Port Talbot on average over the years 1963 to 1965 were £716,943 and, on the existing profits basis, the rateable value was, therefore, £95,000. On the formula under this Order, I calculate that the figure will be about £45,000, which is a very substantial difference. If the 7½ per cent. on gross receipts is applied throughout the dock undertakings, in some cases substantial increase in rateable value will result, in others substantial decrease.
That must necessarily follow because the sources of revenue for each dock or harbour are not the same. Rents of property in one dock may include services, the payment for which should not be rateable; in another dock they may not be included in rent. Some docks may charge for cargo handling facilities; some may not. But these items will come into gross receipts if they are charged by the docks, and will not come into them if they are not charged. We are, therefore, not comparing like with like from one dock to another.
Perhaps the most substantial difference in docks, a difference which will increase over the next few months, is the charge for stevedoring. It is Government policy that ports should take over stevedoring, and charge for it, of course. In some cases now that is part of the gross receipts of a dock undertaking, and over a short period of time others will be changing to that system. Again, some docks own office blocks on the fringe of or within the dock estate. In the rents of those office blocks there may be provision for


lighting and heating to be paid for by the landlords. Here again, some dock undertakings adopt one practice and some another. Some dock undertakings may collect river dues, as opposed to normal dock charges; other dock undertakings do not have any such receipts within their revenue.
Another substantial difference is that some docks provide labour; this may be a substantial item of revenue to a dock undertaking—a substantial item of expenditure, too. When we compare a dock which provides labour with another which does not, we are not comparing gross receipts on a like basis. I question whether the gross receipts formula is a satisfactory formula on which to base rateable assessment. It is our duty in the House to try to hold the balance between, on the one hand, the local authorities and other ratepayers within their area and, on the other, the dock undertakings and the consumers who eventually pay for the goods which come through the docks.
I ask for an assurance that the 7½ per cent. will not become a firm precedent for a future Order applying to all docks and harbours, and that we shall be able to continue the discussions and negotiations to try to work out a proper and fair formula. This is a complicated Order. It brings before the House an entirely new principle of rating. We have never had to consider rating from the point of view of a percentage of gross receipts on any undertaking. We have had to consider it before not just from the valuation of the property on a rental basis but from the profits earned out of the property, and we have become familiar with that; there are many decided cases on it; but this is an entirely new matter, which is brought before the House on an Order applying only to one undertaking.
I am concerned that this Order should not be a precedent without further discussion.

11.23 p.m.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Reginald Freeson): I straight away give the assurance that this is not a precedent, nor is it a pilot or test scheme, to quote the words of the hon. Member for Crosby (Mr. Graham

Page). I think that he has perhaps misunderstood the position a little, despite the detail in which he went into the matter.
As the hon. Member rightly said, the conventional method of getting the rateable value of a property is based on the rent at which it might be expected to be let, and normally this can be based only on the evidence of rents actually passing for other, similar, property. The property with which we are dealing here—docks and harbours—is never let, and in these cases the valuer has to estimate the rental value on the basis of other evidence. Statutory docks and harbours are assessed on the basis of their profits.
The profits method does not provide altogether satisfactory results for docks and harbours; in particular, as the hon. Member has said, it tends to produce very low, or even nil, assessments for older undertakings and high assessments for undertakings in which there has been recent heavy capital investment.
It is this kind of scheme with which we are concerned, the Port Talbot scheme. It was because of this state of affairs this uneveness in results—and not so much because of the detailed history which the hon. Member set out—which was generally recognised to be unsatisfactory that power was taken in the Rating and Valuation Act 1961 for the Minister to provide by Order for the Valuation of docks and harbours by a formula.
Consultations about a formula for valuing all statutory docks and harbours are now well advanced, but not complete. It is hoped that it will be possible for an Order to be made, prescribing such a formula for the rating years from 1971–72 onwards. It is the intention that the general Order, when it is made, will supersede the present limited one now before us. This Order follows an undertaking given in 1966 by my right hon. Friend the Member for Coventry, East (Mr. Crossman), who was then Minister of Housing and Local Government.
At that time proposals were afoot for the construction of the new tidal harbour at Port Talbot, to accommodate large iron ore carriers bringing in supplies to Margam steelworks. The object was to establish considerable economies of scale by bulk conveyance. However, the rateable value of the new harbour, on the


usual profits basis, would have meant an assessment of over £1 million—more than the combined assessments of the Ports of London and Liverpool.
A rate bill based on an assessment of this magnitude would inevitably have threatened the whole project economically and undermined its very objective. The extra rates would have wiped out the savings expected from importing in bulk. As the Government already had in mind a formula to produce more sensible and even assessments for docks and harbours, it was decided that when the new harbour came into operation its assessment would not be more than half the assessment which would be produced by the profits method. This harbour at Port Talbot will come into operation in 1970–71, while the general formula will not be ready to take effect before 1971–72.
To fulfil the undertaking given by my right hon. Friend, special provision has to be made for Port Talbot, for this coming financial year at least. This Order is expected to produce an assessment for Port Talbot in the coming year in the region of about £200,000, which is well within the terms of the undertaking. In the view of the present Minister this is a reasonable figure when viewed alongside the profits-based assessment with which it will be contemporary.
During the drafting of this Order the Department has consulted all concerned on both the local authority and port authority sides, as well as the B.S.C. These bodies are generally content with the Order as an interim measure, although there are parts of it which they do not wish to be taken as precedents for the general Order—naturally enough, as negotiations on that Order are still in progress.
I am glad to take this opportunity of assuring the House and all those concerned, that this Order is entirely without prejudice to the general Order and, I stress, should not be taken as a test Order or a pilot scheme. It is an interim measure. One question asked was why have the 7½ per cent. basis of relevant profits for rateable value assessments. I have dealt with this in my general observations. It is because this figure produced a sum which is reasonable as compared with the amount which would be produced by the normal profit-based assessment.
I stress again, however, that it is not a figure which will necessarily repeat itself in the formula. I make no judgment about that one way or another at this stage. The negotiations are continuing, and the present Order is confined as an interim measure to Port Talbot alone.

Question put and agreed to.

Resolved,
That the Docks and Harbours (Valuation) Order 1970, a copy of which was laid before this House on 4th March, be approved.

TELEVISION (LEVY)

11.30 p.m.

The Minister of Posts and Telecommunications (Mr. John Stonehouse): I beg to move,
That the Television Act 1964 (Additional Payments) Order 1970, a draft of which was laid before this House on 17th March, be approved.
The purpose of the Order is to reduce, by an estimated £6 million in a full year, the amount of the levy of additional payments due from the independent television programme contractors under Section 13(1)(b) of the Television Act, 1964.
It is common ground between both sides of the House that the right means of ensuring that the public purse shares in the income accruing to the programme contractors from their commercial exploitation of an asset at public disposal should be the one that has been adopted. Indeed, the right hon. Gentleman the Leader of the Opposition expressed his support for it as late as 3rd December last year, when we last debated broadcasting. So this will not be the occasion for me to explore the merits of the 1964 Act or this provision in it, but I think it worth while putting on record again the fact that the principle of the levy is not in question.
The facts are that the financial position of the independent television contractors has changed for the worse since this time last year, and to a much worse extent than anybody foresaw at the time when the House decided to approve the increase announced by my right hon. Friend the Chancellor of the Exchequer in his Budget statement on 15th April, 1969. At that time, as the House will recall, the return achieved by the independent television contractors on their investment during the three years ending with 1967–68 had been well over 40 per


cent., which is no mean return, considering that some of them had enjoyed an even higher rate of return in the years before that.
We took account last year of the increased costs which the contractors would incur with the introduction of colour programmes and of the fifth major contractor, that is, Yorkshire, which was brought into the network arrangements. But we concluded that, in all the circumstances, the increase of £3 million was reasonable.
The I.T.A. did not agree with the increase on which we decided. However, the scale of the levy under which the amount payable varies with the level of contractors' advertising receipts was arrived at after discussion with the Authority and was accepted by it as the fairest distribution.
Hon. Members will recall that I gave an undertaking when the House debated the 1969 Order—I believe that the undertaking was unprecedented—that we would review the matter and bring another Order before the House if the worst fears of the television contractors were realised. I am glad to bring this Order forward tonight, for it honours that undertaking. The contractors had told me that they foresaw rising costs and a sharp decline in their profits during the current contract year, but, in the event, even the contractors were wrong, because they fared far worse than they could have foreseen on the information available this time last year.
On 19th January this year, the I.T.A. put to me representations that there should be a substantial reduction in the amount being imposed on the contractors. I am satisfied, after full discussion with the Authority, that the companies were faced with sharply increasing costs. We also found—this was a factor which nobody had been able to foresee—that there had been a sharp decline in the contractors' advertising income. During the 12 months ended in April, 1969, total advertising revenues were £101·5 million. However, during the current contract year, ending in July, 1970, the prospects are that the advertising revenues may fall to £93 million. But for some of the smaller companies the experience has been more acute. I have no intention of giving the figures for the experience of the particular companies, and the House

will not expect me to give them. However, hon. Members will know of the problems of, especially, Scottish Television and Border Television. Other companies might have been in similar difficulties if we had not decided to act as we are proposing to act.
I am aware—I will no doubt carry the House with me in this—that the industry must make every effort to meet rising costs by improved economies and efficiency. That is why my right hon. Friend the Chief Secretary and I propose to refer the companies' costs and incomes to the P.I.B. That will give the board an opportunity to look at the operations of the programme companies and, if it feels that it would be helpful, to propose changes in the way they do their business.

Mr. Christopher Mayhew: Would my right hon. Friend explain why he is giving this great hand-out to companies, a number of which are already excessively profitable, before sending the matter to the P.I.B.? Would it not have been more sensible to have made this hand-out conditional on some economies being made, and certainly not before the P.I.B. reported?

Mr. Stonehouse: My hon. Friend is under a misapprehension. We are not giving a hand-out. We are taking less from the programme contractors than we announced we would take a year ago. That is not a hand-out. It is simply adjusting the amount that we take from them. To suggest that it is a hand-out implies that the taxpayer is somehow providing them with a subsidy, which is not the case. We are simply reducing the amount we take from them and we are doing this in the light of the situation as we now know it to be. We are doing this in view of rising costs, but, more particularly, because of the reduction in advertising income.
I believe that the House in general agrees with the action that we propose in the light of the factors I have outlined. It is not that we are being soft with these firms. We want to make the right decision and we believe that we are making it. We recognise that they can achieve some increased efficiency and, in the light of the P.I.B.'s report, perhaps they will be able to act more effectively along those lines.
If, as my hon. Friend suggested, we had waited for that report, we might have waited another six or eight months before making this reduction. That would have left a number of programme contractors in a difficult position, particularly in Scotland. The House would not have been in general agreement had we been tardy in the way we dealt with the matter.
We have, therefore, decided on this new scale, which has been tailored to give proportionately greater relief to the smaller and medium-size companies—thus companies whose advertising receipts do not exceed £2 million that is, the four smallest, will, from 15th April next, no longer be liable to pay. Companies earning up to £9 million will pay nearly £600,000 less. Companies whose receipts reach £16 million will pay nearly £800,000 less.
The effect of the new scale is not merely to take away the £3 million increase approved by the House last year; it is to bring the yield of the levy £3 million below the yield which would have been produced by the rates of levy provided in the Act brought in by right hon. and hon. Gentlemen opposite in 1963. Last year we estimated that the new rates then introduced would produce £29 million in a full year instead of the £26 million which the previous scale would have produced. Because of the fall in advertising receipts, the yield of the levy would have been unlikely to exceed £26 million at last year's scale. At the original scale, which operated before last year's increase, it would thus have reached £23 million. On the scale now proposed the estimated yield will be £20 million.
In an editorial comment on 17th March this year, the Financial Times welcomed the decision that I announced. It referred to the circumstances in which the decision had been made; in particular, that advertising income had declined by 1·3 per cent. against an estimated rise of £3 million which had been anticipated last year. It went on to say:
In these circumstances the Government's decision should not be regarded as a victory for the companies, or as a change of policy in the face of the industry's criticism. It represents a reasonable reaction to the realisation that the situation in the industry has turned out differently from what was expected 12 months ago.

I believe that the House will endorse that view. I therefore invite the House to approve the Order.

11.42 p.m.

Mr. Paul Bryan: I shall not make a long speech tonight. I think that everybody will agree that this Order vindicates every speech that was made from this side of the House in the debate on 16th June on the Order imposing the levy, every statement that we have made on the subject since, and every relevant Question that we have asked at many Question Times.
I admire the gallantry with which the Minister has defended the Chancellor's original decision, which, as he knows, was based at the time on a lack of homework.
The Minister said that there has been a great change in factors. Nevertheless, every forecast that we then made has become broadly true. Even the advertising slump has not come as a great surprise to the advertising agencies. So the knowledge was there and the Government must accept the responsibility for yet another blow to the morale of the broadcasting community. Over the last year there have been literally hundreds of employees in I.T.V. who have been in real fear of their jobs.
This levy increase itself has affected the advertising revenue. I think that all are agreed that for a time last year and the year before advertisers lost confidence in I.T.V. as an advertising medium. Everything seemed to be going wrong. First, we had the strike; there was then the general disarray that followed the hand-out of the new franchises; there was the trouble at London Weekend; and, finally, there was this levy, yet another blow to the industry. All these factors added up to a picture of I.T.V. not being quite what it was.
I think that already there is recovery. I.T.V. now attracts 56 per cent. of the viewing audience. Tonight's concession, to give it its due, will be another factor towards reviving confidence in I.T.V. as an advertising medium. On the face of it, I do not see how this industry can complain of its accounts being submitted to the National Board for Prices and Incomes. Many and varied industries have already suffered similar inspection.
Nevertheless, it is debatable whether a highly creative, super-risk-taking industry of this sort—one can hardly say it is


not risk-taking when one has to settle for a franchise of only six years—is suitable for Government control, guidance and regulation to this extent. This creative industry is beginninig to be reduced to the status of a public utility or a semi-nationalised industry.
If it is thought that I am overplaying this card, the House has only to look at the situation as it now stands. The level of levy will clearly be fixed in future in accordance with the findings of the N.B.P.I. If the industry wants to put up its advertising rates, it must seek the approval of the Post Office; so in one way or other the profits will be regulated by the State to within a few per cent. The I.T.A. builds up reserves for perfectly legitimate reasons, against anticipated commitments. Even these reserves can be removed by the State quite arbitrarily without notice. I wonder: is this the right background to an industry which is highly risk-taking——

Mr. Mayhew: Mr. Mayhew rose— —

Mr. Bryan: Let me finish this passage—not only highly risk-taking, but desirably risk-taking?
The industry should take risks since, to produce good programmes, it must experiment. If profits are over rigidly controlled, companies are moved to play safe and production will suffer. At the moment, the industry is committed to investigation by the N.B.P.I. We must seriously consider for the future whether this produces the sort of climate in which a would-be creative industry gives of its best.

Mr. Mayhew: The hon. Gentleman keeps on referring to the industry as risk-taking. Surely the one thing that is plain is that nine times out of ten if one invests in this industry one makes a profit, and the tenth time, if there is any risk of making a loss, the Government come to its rescue by reducing the taxation.

Mr. Bryan: The hon. Gentleman is out of date. There was a period when industry could hardly help expanding. As the number of television sets increased over the years advertising revenue rose. We have now reached saturation point. An entirely new situation arises and new steps are required.
The Government should therefore consider whether the levy is right in its present form. For the reasons I gave in replying to the intervention by the hon. Member for Woolwich, East (Mr. Mayhew), the levy as we know it was suitable in a situation where the industry was in a state of natural expansion. It is not so suited in today's situation. If a levy is to be continued, should it not be at a level fixed for the duration of the franchise, in the same way as a lease is negotiated for a definite period?
In welcoming the Order, I wish to put in perspective what it does as opposed to what the papers say it does. Clearly, it has rescued smaller companies from extinction. But it does not get I.T.V. out of the wood. Costs are rising. As a simple illustration, I am told that the Mountbatten series cost £350,000, but that if it were produced today it would cost £500,000. The cost of I.T.N. over the last three years has risen by over £1 million. All these costs are soaring. I will not repeat the figures for advertising that the right hon. Gentleman has given us. The total capital cost of colour television is about £25 million. The cost of servicing such a sum is now £2·5 million. The latest figure for working in colour is £5 million, plus £5 million depreciation.
All these factors are simply not met by the net reduction in the levy of £3 million. If he doubts this the right hon. Gentleman has only to put to the present contractors the straight question whether they would accept another contract for the next six years on exactly the terms that are now available.

11.51 p.m.

Mr. Christopher Mayhew: I wish that I could congratulate my hon. Friend on his decision, but I find it an astounding decision to hand out £6 million to I.T.V. shareholders. My right hon. Friend says that he is not handing anything out; he is merely relieving them of an imposition. We are all hoping that the Chancellor will take 6d. or 1s. off income tax in his Budget.

Mr. Hugh Jenkins: Not all of us.

Mr. Mayhew: Not all of us—but I am sure that the public is hoping.
I am sure that we shall not hear my right hon. Friend the Chancellor explaining to the public, "I am not giving the taxpayers anything. I am not offering anything. I am simply taking less away from them." This is a hand-out, like any reduction in taxation. It is a hand-out to the most prosperous, influential and least deserving lobby in the country. I am astounded to see a Minister in a Labour Government doing this.
The reason given by the Minister was wholly inadequate. He said that there were two companies in difficulties—Southern and Border, but he could not tell us what the facts were.

Mr. Stonehouse: It was not Southern and Border; it was Scottish and Border.

Mr. Mayhew: I beg pardon—I should have said Scottish and Border.
My right hon. Fiend did not tell us the facts. We have to reduce taxation to practically all I.T.V. companies on hearsay. My right hon. Friend said that it would not be proper for him to tell us any facts about their being in any difficulty. The House has not the right to know, when it is asked to reduce taxation, what is the financial position of the beneficiary. That is an entirely new principle. We have Chancellor after Chancellor reducing or increasing taxation, but always giving the House some idea of the merits of the case. Why should not we know the profitability or otherwise of Border or Scottish Television?
What do we know about them? Are they making profits, or are they making huge losses? Why should the information be private? They are public companies. Is not Scottish Television a public company?

Mr. David Steel: Will the hon. Gentleman accept that Border Television has never made the exorbitant profits that some of the other companies have made; that it is unique among television companies in succeeding in getting its entirely local coverage into the Top Ten figures for the area, and that it provides a unique local service, which was in jeopardy under the levy system?

Mr. Mayhew: The hon. Member is making a very good point for the local

Press on Border Television. I take his word for it. But it is not right simply to take the Minister's word about the financial position of Border in reducing taxation. It is quite intolerable that the House should agree to reduce taxation on the ground that two companies are in difficulties and then not be told in what way they are, and what the profit figures are.
But this is a minor part of the grotesque misjudgment which the Government are making. A much worse aspect of their decision is that, because two companies are in difficulties, they are giving a handout to a dozen which are not. Is Anglia Television in difficulties? Why should we reduce taxation for Anglia or for Tyne-Tees?
The Minister quoted the Financial Times, but he did not quote the rise in the share prices of the television companies after his announcement. Anglia's 5s. shares rose 1 s. 6d. to 20s. This is a company which regularly makes 25 per cent., 32½ per cent., 50 per cent. and 51¾ per cent. on its capital. The Government, who refuse money for good causes like the chronic sick, hospitals or schools, give it a bounty. What have Anglia shareholders done to deserve it?
The shares of A.T.V., which will get a hand-out of £75,000 from the Minister, rose 2s. on his announcement to 25s. 3d. That is a vastly profitable concern. The shares of Tyne-Tees went up 25 per cent. to 4s. 3d. In 1960, that company paid a dividend of 450 per cent. Since then, it has got more profitable still—but not profitable enough, apparently, for the Labour Government, who hand out taxpayers' money to its shareholders. Grampian's shares rose 1s. to 6s., and its record on dividends also ranges from 25 per cent. to over 50 per cent.—still not enough for the Labour Government, who reduce its taxation and give it a handout.
This is one of the most grotesque extravagances and the most grotesque abuse of public funds which I have heard of during my 25 years in the House. I hope that, later, the Government will not ask for economies here and there. If anyone asks me in my election campaign to give an example of wasteful public expenditure, it is handing out millions of pounds to I.T.V. shareholders, who are already excessively rewarded.
Third, the Minister is not solving anything with his hand-out. He is only tinkering with the problem. The hon. Member for Howden (Mr. Bryan) started to lay his finger on the problem, by asking whether it was enough. Suppose advertising revenues fall again. Why does the Minister think that they will remain constant? There is no reason. They might fall, although at the moment they are rising. What happens if they fall? Does the Minister take more off the levy? If they rise, will he increase the levy? This is the most clumsy way of tinkering with the problem.
The fourth reason why this decision is so deplorable is that it is unconditional. This hand-out has been given to these shareholders without laying down any conditions about efficiency, extravagance or programme quality. What assurance has been given that programme standards will now improve? Lord Shawcross wrote in The Times on 8th January. He is the Chairman of Thames Television. He said:
I want the shareholders' capital to be sufficiently rewarded to enable and encourage them to spend larger amounts on producing programmes which will not only have public appeal but which will also have high quality.
Now that he has his money are we to expect an improved policy of programme on Thames Television? Has the Minister laid down any conditions? Has he got any assurance?
It seems to be extraordinary that this concession should have been made wholly unconditional, and unconditional in regard to the extravagance of I.T.V. because the simplest calculations show that I.T.V. is extravagantly run. The simplest calculation is that the B.B.C. has £58 million in order to produce two channels, whereas I.T.V., under the Minister's new dispensation, will have £60 million to produce one channel. That is to say, I.T.V. is more than twice as extravagant and expensive as B.B.C. 1 or 2.
It shows that there is grotesque extravagance in I.T.V. And the Minister, instead of saying, "Let us have an investigation by the P.I.B. of your costs and profits, and when we see what is happening perhaps we will relax taxation "—or reimpose it, or increase it; instead of that he gives a hand-out, and then says, "We will look at this

grotesque extravagance as revealed by these figures." Again, this seems to be a most extraordinary thing to do.
One has only to look at the structure of the I.T.V. to see that it is bound to be extravagant. Take the average regional programme. I looked at the newspaper this evening to see what was on Southern Television. It read: "6–6.20 South Today." Then "As London" until "11.27—News and Weather". That is to say, 20 minutes of Southern Television. And for that one needs, of course a chairman, a board of directors, a planning staff, public relations people to pressure the Minister. This whole grotesque structure might have been constructed to get the maximum number of people earning the maximum amount in order to produce the minimum of television.
Finally, we come to the basic point: why have the Government so quickly and tamely surrendered to this lobby? It is, as I say, the most powerful, the most prosperous and the least deserving lobby in the country. It is the lobby of the I.T.V. shareholders. Why are they so powerful? Why, when they whistle, does the Cabinet run?
First, the I.T.V. shareholders include most of the newspapers. That should never have been the case. The newspapers should always have been jealous of their independence. The power of television and the power of the newspapers should have been such that each could criticise the other. As it is, they are in each ether's pockets, as a result of an issue like this——

Mr. Deputy Speaker (Mr. Sydney Irving): Order. I think that the hon. Gentleman is going beyond the scope of the Order.

Mr. Mayhew: I absolutely accept your Ruling, Mr. Deputy Speaker. I was trying to indicate the reasons for the Government accepting the pleas of the I.T.V. shareholders' lobby and, conversely, why the House should reject them.
One of the reasons why this lobby is so powerful is that the I.T.V. shareholders include most of the newspapers, and they dispense almost the most coveted patronage in the country, which is the ability to grant or to withhold appearances on television. In the entertainment and the political worlds this is a very great source of influence and power.
If the lobby is so powerful, it is a distressing thought that the value of a Royal Commission to inquire into the future of broadcasting is very doubtful, especially when we think of what is likely to happen to the Royal Commission's recommendations. Will the same thing happen to this new inquiry or Royal Commission report as happened to the Report of the Pilkington Committee? The Pilkington Committee's main recommendation, unanimously agreed——

Mr. Deputy Speaker: Order. I think the hon. Member is now challenging the basis of the original Act. That is not permissible on this Order.

Mr. Mayhew: Perhaps I was straying a little there, Mr. Deputy Speaker.
I urge the Minister to stand up to these pressures, no matter how powerful and important they are, and to look at the point of view of providing money in the interests of the viewer. There has been grotesque squandering of money. This £6 million will simply go into the pockets of some of the most prosperous shareholders in the country, not necessarily the most deserving and certainly not the most risk-taking. It was a naïve point that was made by the hon. Member for Howden.
The argument that there was a risk was their justification for massive profits in the early days when they defended their licence to print money. Now we see the falsity of that argument. Their money was never at risk. There was never the slightest possibility of their making a loss, because the Government ensured that no one would ever make a loss. I hope that this is not the last time the Government will feel the criticism of the mistake they have made. I hope that the Minister will take an early opportunity to rectify that mistake.
When my right hon. Friend winds up the debate, I hope that he will at least give the assurance that when company advertising revenue goes up again—and it is up-turning—he will not allow the harvest to be reaped by all these companies. I hope that he will reinstate the level of taxation to where it was before. Otherwise, this heads-I-win-tails-you-lose attitude will lose the Government much credit in the country.

12.6 a.m.

Mr. Hector Monro: The hon. Member for Woolwich, East (Mr. Mayhew) has been a little unfair to the smaller companies. In his criticism of what he called the least deserving lobby, he failed to understand in how serious a position the smaller companies find themselves. It was not a matter of more money for shareholders but of a television service or no television service. In constituencies such as mine and that of the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) it is absolutely vital to have entertainment in the remoter areas for our constituents to watch on television.
I am certain that the Minister is aware of the serious situation among the smaller companies; otherwise, he would not have brought in this Order. He has taken steps to relieve the serious situation, not only for smaller companies such as Border, but the medium-sized companies in Scotland such as Grampian and Scottish Television. They were in a very worrying situation. There was certainly not the capital available for colour television which will be the most important feature for the future.
The hon. Member for Woolwich, East said that there was no assurance that this reduction in the levy would improve services. I think that he is wrong. The spur of competition improves services and the money is required so that there can be fair competition between the B.B.C. and I.T.A. in the introduction of colour. Companies such as Border Television have very good regular programmes which are appreciated over a wide area, spreading from the Isle of Man to Berwickshire. They deserve all credit for what they have done in this regard.
My hon. Friend the Member for Howden (Mr. Bryan) rightly said that this situation was foreseen a year ago. We on this side then said that the levy was unreasonable. Our criticism has been justified. The credit squeeze reduced advertising revenue. The unwillingness of many firms to launch new products held back their advertising budgets. Higher costs played their part. All in all, the burden of the advertising levy was just too much for the smaller companies to bear.
I know that it would have delayed the introduction of colour television by Border Television, even if more serious consequences had not resulted. In the area covered by Border Television two programmes are essential—we do not receive B.B.C.2. It is a wide area. The population is large, if the south of Scotland and Cumberland are added together. The possibility of losing Border Television was more than anyone in the area could bear to think of.
I welcome the Order because it will allow the smaller companies to regain the impetus of modernisation and proceed with the introduction of colour and continue the local programmes to which they have always devoted a high proportion of viewing time. I am glad that the Minister did not delay introducing the Order. It is urgent. For the many reasons that my hon. Friends and I have advanced, I hope that the Crder will be agreed to, because it will bring happiness to areas that appreciate their local television stations.

12.13 a.m.

Mr. Hugh Jenkins: One would not have thought from listening to the hon. Member for Howden (Mr. Bryan) that we were debating an Order which stems from a proposal introduced by the Tory Party. The hon. Gentleman was very smug about it. What the hon. Gentleman did not make clear was that while we have an absurd situation we are bound to have the sort of situation which exists here. What is wrong is the system which the Tory Party introduced and which places the programme companies in a situation which would try a saint.
The means by which this situation could have been avoided was mentioned by my hon. Friend the Member for Woolwich. East (Mr. Mayhew), but hon. Members opposite would have none of it. They went out of their way to avoid carrying out the recommendations of the Pilkington Committee, which would have done away once and for all with the ludicrous nonsense which we have at the moment and which we shall go on having. We seek by parliamentary action to intervene every now and then, first, to ensure that the operation is not too profitable and then to correct the con-

sequences of doing just that. He said that the National Board for Prices and Incomes was to be asked to look at the operations of the programme companies. I wonder what that means.
After the board has looked at them. I take it that it will then come forward with some recommendations. Is the board limited to considering purely financial matters in the narrowest sense, or can it come forward with rather more substantial recommendations, even possibly involving considerable changes in the relationship between the Independent Television Authority and the larger programme companies so that it might be necessary for my right hon. Friend to introduce fresh legislation? Would this be possible? Indeed, is it my right hon. Friend's expectation that something will come out of this P.I.B. recommendation which will make it unnecessary for him to continue considering the introduction of measures which I would have thought he must be somewhat reluctant to introduce? I recognise the limitations which an Order places upon the Minister.
My hon. Friend the Member for Woolwich, East would have preferred the smaller programme companies to receive a larger amount of benefit and the larger companies a smaller amount. I certainly would. Some of the smaller companies are in real difficulty. Several companies have been mentioned, but there are others which have their difficulties. I am sure that Ulster Television has its difficulties; in fact, I am not at all sure that Ulster is not in greater difficulty than some of the other companies which have been mentioned.
The Order provides Ulster Television with relief to the extent of £70,000, but it provides A.T.V. with £750,000—ten times as much for the company that does not need it as is provided for the company which does need it. I should like my right hon. Friend to comment on this, if he is able to catch your eye, Mr. Deputy Speaker. I should like to know whether my right hon. Friend would have preferred not to have done it this way but that he found himself under the necessity of doing so. Is it a fact that he could not have introduced in this Order some of the measures suggested by my hon. Friend the Member for Woolwich, East? Could he have intro-


duced a requireement that any relief given under this Order should be spent by the programme companies on programmes?
My hon. Friend said that the companies are extravagant, but they are not extravagant in the amount of money that they spent upon their programmes. Certainly, it seems to be the last thing upon which I.T.A. thinks of spending money. This money, as the Pilkington Committee recommended, should be taken not from the gross advertising revenue, but from the net receipts less the certified programme expenditure. It may be that that cannot be provided under such an Order. If that is so, I hope my right hon. Friend will say so.
I should like to correct my hon. Friend the Member for Woolwich, East on one point. My hon. Friend referred to the levy continually as taxation, which is understandable because the money finishes up in the hands of the Chancellor of the Exchequer. We are inclined to take the view that anything that finishes up there is tax. But the money should not finish up in his hands. It should not be regarded as a tax, because it is a correction of too small a rate being charged for the exclusive right to browse in some pretty lush pastures. Some of the browsing over the years has been pretty rich and ripe, and great benefit has been obtained by people who did not really need the substantial benefit they are acquiring from the relief, particularly as there is no guarantee that the money will be spent where it should be spent, on the programmes.
I believe that the smaller companies did need and do need this relief. They would have been in some difficulty if it had not been provided. I regret, however, that it has been provided in the way in which my right hon. Friend has chosen to provide it. I hope that he will explain to us that he had no alternative but to do it in this way, if I am right in thinking that that is so—being charitable towards him—I hope that he will say that it will be possible, perhaps as a result of the recommendations of the Prices and Incomes Board or for some other reason, such as his own inclination, to look again at the legislation and to try to get it right, because patently it is simply not right now.

12.22 a.m.

Mr. Russell Johnston: I shall seek to emulate the brevity of the hon. Member for Putney (Mr. Hugh Jenkins), who set an example.
Granting the broader references to Pilkington that the hon. Member for Woolwich, East (Mr. Mayhew) made, and admitting, also, the long and honourably consistent record he has, I still felt that to refer to the Order as the most grotesque abuse of public funds he had heard of in 25 years was rather an exaggeration. If it were an accurate description I think that these benches would be packed. In fact, they are not, and here is a voice crying in the wilderness—perhaps not an inappropriate place for the hon. Gentleman to be crying.
We in the Liberal Party welcome the Order and recognise that it represents the fulfilment of a pledge, as the Minister said. We are always happy to see pledges fulfilled, and I did not think that it was necessary for the Minister to produce the editorial from the Financial Times as a prop. It was a very good thing that he fulfilled the pledge.
As several speakers have said, the Order does not solve anything in the long term, though it at least provides the opportunity for certain things to be alleviated in the short term in that, as the hon. Member for Howden (Mr. Bryan) said, certain independent companies have had the real threat of dissolution removed.
The hon. Member for Putney touched on the basic problems more than any other hon. Member. One of them is how exactly we can seek to evaluate independent television, and this problem remains. How do we estimate what the independent companies do or do not need? If there is to be a reference to the Prices and Incomes Board and then, one assumes, some kind of cost-effectiveness evaluation, how do we evaluate such a service in those terms? How do we evaluate a creative industry in public utility terms, to use the words employed by the hon. Member for Howden?
The Charter of the I.T.A. directs it to provide a service. We must not lose sight of that during our discussion of the need to establish a clear indication of financial accountability. I am sure that the hon. Member for Putney would have wished


—indeed, he did do so indirectly—to draw attention to Motion No. 106 on the Order Paper, standing in the name of the hon. Member for Billericay (Mr. Moon-man), which calls for a Royal Commission to be set up to consider the communications media as a whole. The hon. Member for Woolwich, East referred to Royal Commissions in general and to Pilkington in particular, commenting that Governments in general are perhaps rather loath sometimes to put Royal Commission reports into effect. But that of itself is not an argument against setting up such a commission in this case. Obviously, in this Order, we are not dealing alone with Independent Television. The whole question of broadcasting is causing concern.

Mr. Hugh Jenkins: I welcome the hon. Gentleman's reference to the possibility of a Royal Commission. Would he agree that a Select Committee of the House might be a good idea?

Mr. Deputy Speaker: Order. I think that both the hon. Member for Inverness (Mr. Russell Johnston) and the hon. Member for Putney (Mr. Hugh Jenkins) are now getting wide of the Order.

Mr. Johnston: It appears that you have precluded me from making a direct response to the question of the hon. Member for Putney, Mr. Deputy Speaker.
It is again worth reminding the House of the meeting last week of the 76 Group, under the chairmanship of my hon. Friend the Member for Cheadle (Dr. Winstanley), which was composed 50 per cent. of people from independent companies. It is not only in the B.B.C., which often gets a greater degree of publicity, that there is turmoil about what the future should be.
In the area I represent, the Order will have the effect of relieving Grampian Television of the obligation to pay the levy. Despite the remarks of the hon. Member for Woolwich, East, it is our experience in the Grampian area that, for a fairly sparsely populated area like the Highlands and the North-East of Scotland—it would be out of order if I referred to the fact that the service is still not as wide as we wish—the importance of having a station concerned with and involved in the interests of the area is very considerable indeed.
The hon. Member for Woolwich, East rightly pointed out that the television companies wield a great deal of power, but I do not think it was quite fair to suggest, as he did gently, that if one speaks up for a particular company one is somehow influenced by the opportunities it presents one. Nor is it really a fair comparison—and this sort of thing is applicable not only to Grampian and Border Television but equally to Scottish Television and some other smaller companies—to pick out 20 minutes in the evening on Southern Television. From my rather remote position in the North of Scotland, I doubt whether Southern Television is particularly distinctive from Thames Television or A.T.V.

Mr. Mayhew: Nevertheless, I wager the hon. Gentleman that, at the peak hour tonight, Grampian Television was showing the Danish "sex fair".

Mr. Johnston: I have not had an opportunity to see what was on. I am not quite sure what the hon. Gentleman would regard as the peak hour, which covers a fair range of time. I would not like to comment on that matter.
Despite the fact that smaller companies show an interest in international matters outwith their local borders, it is nevertheless true that they are capable of the sort of commitment to an area that the B.B.C., for all its regionalisation, is not capable of. The Grampian area for the B.B.C. is a segment of a region, and the B.B.C. is, therefore, not likely to have the same involvement in it. Equally, S.T.V. has been considerably relieved under the Order, and we know, whatever remarks may have been made at one time or another by Lord Thomson in another place, that a series of dramatic programmes, including a dramatic projection of the Scottish Office, had to be postponed, together with several other programmes, on account of the financial crisis.
I go all the way with the hon. Member for Putney. We are likely to decide tonight to relieve the companies of £6 million, and the Minister, therefore, has a clear responsibility to do what he can to ensure that this money is used for maintaining programme standards rather than—as the hon. Member for Woolwich, East suspected—for increasing the profits


for the shareholders. As the hon. Member for Woolwich, East has said, there is evidence that if television companies are under financial pressure programmes tend to suffer. While I agree that the Minister has done the right thing, and while I enter the caveats I have made, it is important that the Minister should say what he seeks to do to ensure than the television companies maintain standards in return for the concessions he has given.

12.32 a.m.

Mr. Edwin Brooks: The hon. Member for Inverness (Mr. Russell Johnston) referred to my hon. Friend the Member for Woolwich, East (Mr. Mayhew) as a voice crying in the wilderness. I am not sure whether my hon. Friend feeds on locusts and wild honey, but I am sure that this spartan diet is not the regular fare of independent television companies. Like him, I am astonished at the impression which may have been created in the past few weeks that the Government's help was necessary, and in this particular form, if independent television was to survive. I have listened to the pleas which have been put forward for the smaller companies, and I am sympathetic to the claims of companies which are trying to fulfil a most necessary and valuable regional function in areas where this sort of work should be prosecuted energetically. But the figures to which my hon. Friend the Member for Putney (Mr. Hugh Jenkins) referred bear some repetition and elaboration. They strike at the very basis of the Government's decision.
My right hon. Friend referred to an editorial in the Financial Times, and perhaps I may be forgiven if I quote this newspaper as authoritative. The figures which were given in that newspaper on 18th March showed that Grampian Television, which is one of the companies which is said to be facing difficulties, will have an estimated gain, based on forecasts of 1970 revenue, of a mere £50,000. This compares, for example, with the £700,000 which will go to Granada Television and the magnificent sum of £15,000 which will go to Border Television as a result of the reduction of the levy.
That, as I calculate it, is about one-fiftieth of the amount going to some of the larger companies. Thames Tele-

vision, for example, will get £750,000, Harlech £600,000, A.T.V. £750,000. I am never particularly good at mathematics, particularly at this time of the morning, but I calculate that the amount which will go to the three companies specifically mentioned tonight as being in great danger, Border Television, Grampian Television and Ulster Television, will be something like £135,000 and will be little more than 2 per cent. of the total amount of £6 million which we are now making available to the independent television companies.
I regard this as a totally inexplicable justification for what is now being proposed. If there is a case for moneys being made available to these poor, struggling companies—and I mean "poor" literally, not in any derogatory sense—surely a more effective method could have been found. I appreciate that, as my hon. Friend the Member for Putney was explaining to the House earlier, there may be some limitations on the freedom of action available to my right hon. Friend through this Order. I appreciate, too, that there is a scaled relaxation of the levy depending upon the revenue derived from advertising, and this presumably is designed to help the smaller companies with a correspondingly smaller income from advertising.
But when we see figures like those quoted earlier, I feel that the House cannot possibly accept the argument that, to give aid to companies like Border—and I suspect that £15,000 will not make all that much difference—we have to hand out £750,000 to Thames. It is difficult to debate this Order in isolation from the wider issues, but it is surely relevant to ask whether what we are really discussing is aid to the independent companies to finance the massive investment which will clearly be necessary for colour television. Is it designed to help cushion them during the next three or four critical years, when clearly there will not be much hope of gaining any extra income from advertisers on the basis of colour television being available, because the market will be well under the 20 per cent. figure which seems to be regarded as a minimal basis for any increase in advertising? If this is so, the amounts which we are giving to the smaller companies are quite frankly, peanuts—we should not even say "peanuts" in the plural. These sums will hardly enable


Border Television, for example, to cope with problems of financing the colour television revolution.
We are facing a much more fundamental problem altogether, but unfortunately we cannot discuss it in detail now. My hon. Friend the Member for Woolwich, East (Mr. Mayhew), although he may have been guilty of some pardonable hyperbole in one or two comments, was quite rightly touching upon it. It has been made clear in a number of comments in authoritative journals that this revenue which the companies are being allowed to receive, which is far better than they might have anticipated a short while ago, will certainly not relieve them of all their problems.
The article I have already quoted by Sheila Black in the Financial Times states that:
all in all, the shortage of ready cash is such a problem with most companies that the improvement in the levy will be a relief as far as running costs are concerned, but will not be the remedy most of them need.
If this is not the remedy that most of them need, there is some point in the question asked by my hon. Friend the Member for Woolwich, East: before giving out this £6 million, why had we not gained the benefit even of an interim report from the Prices and Incomes Board? There have been precedents for the Board being asked to investigate matters of urgency and to produce interim reports pending any major analysis. That could have been done, for example, last January, when my right hon. Friend's Department issued a Press statement, which at that time was clearly a holding operation. Two months have gone by since then, and we have not had any detailed information given to the House about the financial management of the television companies.
Obviously, we are in difficulty here in saying much about the Order because of the absence of precise information, but one is bound to ask whether companies, which, quite understandably, have the profit motive as their objective as commercial enterprises, should have made massive profits over the years—I should hate to repeat ad nauseam the famous remark of Lord Thomson—and then later on, when they find that the situation has not remained such a bonanza for them, should have some sort of right to go to

the Government and say, "Bail us out of our difficulties".
I appreciate that this is an oversimplification. They may argue that the difficulties are, in a sense, created by the framework of taxation policy which the Government impose. But all companies are subject to all sorts of vicissitudes from taxation policy. It does not automatically follow that, the moment a firm runs into difficulties, there should be some sort of reciprocity on the part of the Government to make sure that it does not go to the wall. Are we saying that no television company should be subject to the basic discipline of the market, which is that if it is hopelessly inefficient it goes to the wall? To turn again to the editorial in the Financial Times which my right hon. Friend himself quoted, it was said:
The independent television companies have on the whole a poor reputation. In the past they have boasted too much of their profits. Their rates of remuneration at all levels are high in comparison with most other activities, and over-manning is commonplace.
I feel that a business enterprise which functions in that way, and is criticised authoritatively here by the Financial Times, should be expected to look to itself for at least part of the remedy for the problems which it now encounters.

Mr. David Steel: Does the hon. Gentleman take that argument to its logical conclusion? In a part of the country like the Borders, there is a small company, and there was no competition for the franchise the last time it came up. If it went to the wall, the simple result would be that that part of the country would be deprived of a television service altogether as a rival to the B.B.C. Surely, that is not the hon. Gentleman's argument.

Mr. Brooks: No, and I think that the hon. Gentleman is right to make that point. But in that case the better argument is to say that in certain parts of the country—there is an analogy here with the provision of railway services in remote areas—there must be a specific and explicit grant given because the commercial circumstances there are such that it will never be possible to make a profit by orthodox accounting methods. In those cases, I should have no objection—indeed, the very opposite—to making a specific grant available.

Mr. Speaker: Order. The hon. Gentleman is usually careful to follow the rules of order. He knows that he cannot ask that the Order be amended.

Mr. Brooks: I respect your rebuke, Mr. Speaker. I was led astray by the Liberal Party—not for the first time. But I am sure that the hon. Gentleman takes my point.
Perhaps the epitaph on this Order—I hesitate to quote a third time—is to be found in the article by Sheila Black in the Financial Times:
I telephoned one regional contractor yesterday morning for an estimate of what the levy cut means to his company. 'I will ring you back this afternoon', he said. 'Everyone is at a champagne party right now'.

12.45 a.m.

Mr. Stonehouse: With permission, I will reply briefly to the points made in the debate.
My hon. Friend the Member for Bebington (Mr. Brooks) put his finger on one of the key points in the debate when he said that we were bound by the 1964 Act. I would, therefore, be out of order if I attempted to comment on some of the interesting suggestions which have been made about possible alternative ways of dealing with the position of I.T.V.
I was struck by the debating ingenuity of my hon. Friend the Member for Putney (Mr. Hugh Jenkins), who managed, in an interogatory form, to make a number of points, though he will be aware that the answer was given in his speech on 16th June last when, as reported at column 182 of HANSARD, he said that we were bound by the 1964 Act. That is the position.
Tonight we can only vary the scales. We cannot change the system. We are varying the scales because we are satisfied, after a close examination of, and after having had the advantage of a detailed accountant's report describing the situation in, the firms, that a reduction is required.
It is not only a question of the smaller firms. Border, Grampian, Ulster and Westward will be relieved of any obligation, and the total amount of their relief will be about £270,000. But among the next largest companies, Scottish, Tyne-Tees and Harlech were not having

the easiest of times; and it was necessary to give some relief to them as well.
I do not accept that all the larger companies were having such an easy time as my hon. Friend the Member for Woolwich, East (Mr. Mayhew) suggested. Although I appreciate his sincerity in discussing this subject, I believe that he exaggerated even his own case. He said that he was astounded that the relief was wholly unconditional. I assure him that it is not.
We expect the companies, as we expect I.T.A., to keep to the terms of the franchise, which is to continue to provide programmes of quality and to serve the regional requirements so that the districts of England, Wales, Scotland and Northern Ireland can receive a service on the lines that have been described in the debate. If we had continued the scales adopted last year, some of the companies would have been unable to continue to provide that sort of service. We felt that it was important to introduce this relief soon.
We shall, of course, await the results of the P.I.B. investigation and report. We do not know exactly when it will report. However, I wish to make it clear that we are not asking the P.I.B. to investigate the whole I.T.V. system. It will not be concerned with the relationship between the companies and I.T.A. The terms have not been finally decided because there are processes of consultation through which my right hon. Friend and I must go before we decide what they should be.
I believe that the hon. Member for Howden (Mr. Bryan) was preening himself a little too much when he suggested that everything he had said in the 16th June debate had been proven correct. Perhaps there was one correct statement when he said, as reported in column 180 of HANSARD, that the Financial Times could be regarded as a factual newspaper. I am sure, in view of that, that he would approve of the quotation from that newspaper which I made earlier. I read the hon. Gentleman's speech again and again, and I asked my hon. Friend the Member for Ealing, North (Mr. Molloy) to read it in case I had missed something in it. However, there was no reference to advertising income at all. The hon. Gentleman had not anticipated


that advertising income would drop. Certainly he did not anticipate that it would drop as disastrously as it did for these firms in the past year. That is the new factor, more than any other, which has persuaded us that it would be reasonable and responsible to ask the House to agree to the reduction that I am proposing.
In addition there has been a considerable increase in costs, and colour conversion is costing these firms more than was at one time anticipated. We are expecting the programme standards to be maintained, if not improved. The companies have a duty and a responsibility put on them, and I have every confidence that they will meet that responsibility.
I am grateful to the House for the way that this Order has been received. I now ask the House to approve it.

Mr. Mayhew: Before my right hon. Friend sits down. When imposing this levy, the Government gave an assurance that if things went wrong for the companies they would look at the matter again. Will my right hon. Friend now give the House an assurance that if, after relaxing the levy, things go unexpectedly right for the companies, he will reconsider the matter in the interests of the taxpayer?

Mr. Stonehouse: I certainly cannot give an assurance that we will do any particular thing in future. But we will study with great interest the report presented by the National Board for Prices and Incomes and judge the situation in future in the light of developments that may ensue. That includes advertising income and the projection of costs. I cannot. however, commit future Ministers to what they should do about I.T.V. It may be out of order, but I must indicate that we are now considering the reducing period up to 1976 when the whole of broadcasting will be subject to review.

Mr. Speaker: Does the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) wish to continue the debate?

Mr. David Steel: With your permission, Mr. Speaker.

Mr. Speaker: It is usual, when the Minister has completed his winding up, for the debate to end.

12.52 a.m.

Mr. David Steel: I will not detain the House long. I should like to mention two points about Scottish and Border Television which have featured largely in the debate.
The hon. Member for Woolwich, East (Mr. Mayhew) and others, who remember only too well the remarks about the licence to print money, have not brought themselves up to date with what has been happening in Scottish Television since that observation was made. It does not seem to be clear to the right hon. Gentleman and others that when the franchise was given again to Scottish Television conditions were attached. When Lord Thomson redistributed the shareholding and left the direct control of Scottish Television, he took a good deal of the capital with him. It has therefore been difficult for Scottish Television to undertaken some of the work that it has undertaken, and I believe that there has been a threat—I do not say that it has yet happened—of a serious decline in programmes. But since then Scottish Television, greatly to its credit, has opened a colour television studio in Edinburgh. For many years the B.B.C. was remiss in not having a television studio in Edinburgh. But S.T.V. has led the way and the B.B.C. has followed suit. This is greatly to be commended.
Concerning Border Television, many parts of the area which it serves do not receive B.B.C.2. If Border Television were unable to continue to provide the I.T.V. service many viewers would be limited to one channel only—B.B.C.1. It is only right that this step should have been taken to relieve companies like Border and Scottish.
Those of us who support what the Government have decided to do must not be taken as supporting the framework of the 1964 Act or of prejudging the future of television. Those who argue against what the Minister has decided to do must bear in mind that, if the situation had been allowed to deteriorate further, there would have been a grave temptation in the minds of the directors of some of the independent television companies to make use of the remaining years of their franchise for the benefit of the shareholders of their companies instead of the viewing public. The people who would have suffered had the present rates of levy


continued would not have been the shareholders of the company but the viewing public and the quality of the programmes. That is the main reason that the Order should be approved.

Resolved,
That the Television Act 1964 (Additional Payments) Order 1970, a draft of which was laid before this House on 17th March, be approved.

SMALL FARMERS

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dobson.]

12.56 a.m.

Mr. John Hall: I am sure I have the sympathy of everybody when I say that I do not like Adjournment debates. I am not fond of late nights, although over the many years I have been privileged to be a Member of this House I have often had to take part in late and, indeed, all-night sittings. That experience has not lessened my distaste for debating important matters at an hour when honest men are abed. Therefore, it would have been masochistic of me to have balloted for an Adjournment debate if I had not been moved by the importance of the question I tabled about the small, efficient farmer, on 11th March, and had not been stirred to indignation by the inadequacy of the Minister's reply.
The Minister will not require me to remind him that I asked him then for his
… estimate of the average profit to be made by an efficient farmer, before charging any salary to himself or his wife, from milk production with a herd of 50 cows on some 80 acres of average grassland in the Home Counties, for the years 1968 and 1969 …"—[OFFICIAL REPORT, 11th March, 1970; Vol. 797, c. 1320–1.]
When the Minister was pressed to say whether he thought there was any future for the small farmer, he indicated, rather doubtfully, in the view of many hon. Members, that there was. I am not sure what are his grounds for that qualified optimism. He did not give us those grounds in his reply. Certainly it is not the experience of my constituents, many of whom have been struggling to survive for many years and who have now come to the bitter conclusion, based on the evidence of their own accounts, which

are borne out largely by the figures to which the Minister referred me, that there seems to be no place for the small farmer in British agriculture.
This stark evidence of the figures seemed to be supported by the Home Secretary, who is himself a farmer—I gather he farms 130 to 140 acres—when he spoke on 31st January at Cardigan, in remarks which were reported widely at the time. I quote from the Farmer and Stockbreeder of 10th February, in which he is reported as saying to a Mrs. Mossman, whose husband ran a herd of 50 cows:
Go home and tell your husband not to work like a slave. Milk should come from larger herds than yours.
That quotation, whether or not it is correct, was certainly widely circulated and caused a great deal of anxiety throughout the country. It seemed to small farmers and to my constituents to mean that the Government had decided that there was not future for them.
Last January I received a letter from a small farmer constituent of mine which I used as the basis of my Parliamentary Question, because it seemed to represent the case of many such farmers with similar holdings not only in my constituency but in other parts of the country. For that reason I want to quote the relevant part of the letter. It says:
We took over this 80-acre farm six years ago with limited capital. Working for the first year without hired help and subsequently a young lad we have increased our dairy herd from 14 to 55 cows. However, our profits have not increased for the size of business, but, in fact, we have reached the stage of not having to pay income tax. I would say here that we do our costings with the N.A.A.S. and B.O.C.M. and our figures are well above average. We have made economies where possible and have spent our small profits on making our business more efficient, but we have now reached the stage where it is impossible to accumulate any capital and make any further improvements. The most distressing feature is the sheer hopelessness we feel about the present position. We must be assured of a fair income, so that we can plan ahead. We cannot stand still, but must have more money to plough back into the business, not to mention a fair return for the long hours of hard work.
Figures received from the N.A.A.S. just to hand show a 9 per cent. return on capital; with Bank interest at 10 per cent. and overdrafts increasing rapidly, this is just not on.
In a later letter the writer corrects the figure about the return on capital and says that having discussed this with the


accountants and having again consulted the N.A.A.S. adviser it was found that some large items of expenditure were not taken into consideration, and that a truer figure for return on capital employed would be 5½ per cent.
That is a letter from a hard-working young farmer, regarded by the N.A.A.S. as efficient and, what is more important, regarded by his fellow farmers as a very efficient farmer. I visited that farm, examined the accounts and talked to the farmer and his wife. I visited other similar small farms in my constituency. I spoke to seed merchants, fertiliser suppliers and machinery suppliers, and from every one I got the same story—a story of rapidly rising costs; a story from the merchants of the increasing difficulty they were having in getting their accounts paid by the farmers, for whom they had every sympathy; a story from the fertiliser suppliers that the farmers were having to cut down on essential fertilisers, with possible long-term consequences upon soil fertility, and a general understanding from all the people who are concerned with the farming industry that the farmer's income was falling although the amount of work he was having to put into his farm was in all probability increasing.
What is regarded as a reasonable income for a small farmer with a viable acreage? What is regarded as a fair wage for the farmer and his wife, for the labour and management skills put into the farm by the farmer and the assistance given on most farms by the wife? What is regarded as a reasonable return on invested capital in a farm? The N.F.U. suggests a minimum of about £1,500 a year as a fair wage or salary for a farmer aided by his wife. The Heathrow firemen—who, I suggest, do rather less in the course of a year—earn a much higher income. That is certainly the case with dockers and the car workers in Coventry.
The Ministry of Agriculture report, in the table to which the Minister referred me, which goes up to 1968, showed that the total return that can be expected for a 50–60 acre farm is under £1,300 a year. It has varied over the years from 1966 to 1968 from about £1,132 to just under £1,250. That income is not enough for the wage alone, if it is agreed that an adequate wage for the farmer and his wife is the £1,500 which the N.F.U. has

quoted. It does not provide for a return on the capital invested or for any savings which must be ploughed back for expansion—and all this against a background of a borrowing rate of between 9½ and 10 per cent.
Since 31st October, 1967, 3852 farmers have applied under the Government's grant and annuity scheme to opt out of farming altogether. Do the Government want more small farmers to do this, and let their holdings be merged? Would the hon. Gentleman not agree that, generally, the production per acre on the well-run small farm is higher than on the large farms? It is often said that the best fertiliser is the farmer's boots. He can get around his own small farm, in which he takes a great personal interest, far better than the man who runs thousands of acres, generally through a manager.
In the end, could not the increasing merger of smaller farms result in a fall in the total food production rather than an increase? If so, should we not make great efforts to ensure that the small farmer can operate under conditions which allow him to stay in business? Would the hon. Gentleman say that the Home Secretary was wrong to say that the small farmer, and his particular example—the man with a herd of 50 dairy cows—could and should no longer exist? Would he say that, against a background of the recent Price Review, the efficient small farmer with a viable acreage can expect with some confidence to get from his work a minimum wage for himself and his wife of about £1,500 a year, which is certainly no more and may be less than the couple could get in industry?
Would he say that, in addition, the farmer might get a reasonable return on his capital? The N.F.U. suggests that 15 per cent. is a fair return, and I would not put it even as high as that. Is the small farmer likely to get more in return for capital employed than he pays to borrow money? If not, he has not much future. If the hon. Gentleman cannot say that the small farmer with a viable acreage—I agree that talk of small farms is misleading, because some will never be viable: what I mean is a sufficient acreage of the right ground—can make a reasonable living with about 70


to 100 acres, and perhaps less for specialised farming?
If the farmer cannot look forward to a reasonable future, with a reasonable wage and a reasonable return on capital employed, it is just as well to be honest and to tell him that he should take advantage of the grant and annuity scheme and get out of farming while there is still time.

1.4 a.m.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. John Mackie): The hon. Member for Wycombe (Mr. John Hall) raised this subject a fortnight ago at Question Time and I am grateful to him for raising it now, because I could not reply fully before since you, Mr. Speaker, are not keen on long replies at Question Time. It was difficult to give him the studied reply which he wanted on this subject. The hon. Gentleman was not satisfied with my Answer. He has quoted what I said in another supplementary answer to his right hon. Friend the Member for Grantham (Mr. Godber), when I used the words "I think". I did use those words, but in answer to the hon. Gentleman himself I was quite definite in what I said, that farms of this size have a future.
I did also deal with what my right hon. Friend the Home Secretary said. The Home Secretary was surrounded by a crowd of shouting farmers who were throwing eggs and tomatoes at him. One woman went down on the pavement in front of my right hon. Friend, and both my right hon. Friend and the woman gave their reports to the newspapers. She said that when she told my right hon. Friend that her husband was working like a slave my right hon. Friend said that he should not do so but should seek a bigger herd. My right hon. Friend thought she said 30 cows and not 50, but the hon. Gentleman is sensible enough, I know, not to lay great stress on an incident like that, whether it concerns a Minister of the Crown or a shadow Minister. I hope we shall now have heard the last word on that subject.
In my reply a fortnight ago, I referred him to the Report on Farm Incomes which we produce every year. I am glad to have this opportunity to go

into some of the figures in more detail. I can now also refer to the figures for 1968–69, which were published at the same time as the Annual Review announcement last week.
The hon. Gentleman has expressed anxiety about the future of the small efficient small farmer—and I underline the word "efficient". I should also like the hon. Gentleman to look at the word "small", which he has also used. There are about 80,000 farmers farming less than 20 acres, but there are also those who have between 80 and 110 acres. The writers of the letter he quoted said that they started with limited capital. This often happens. People start with limited capital and can then get into difficulties if interest rates rise—and I shall not go into details of why interest rates rise. These people then have to borrow for their gear, and so on, and, as I say, can get into difficulty. It should be fairly well known by now that the average incomes of efficient farmers are at least five times higher, and often much more, than those of the least efficient. It seems to me that farmers like that are earning perfectly adequate incomes.
In his original Question, the hon. Member referred to the milk producer with 50 cows, so I have looked at our Report on Farm Incomes to see just what the position is. The figures may surprise the hon. Member, and I recommend him to study them; they are set out in pages 81–87 of the Report on Farm Incomes in England and Wales in 1968.
In the farming type and size groups closest to that quoted by the hon. Gentleman in his Question, the most efficient farmers had an average dairy herd of 46 cows. Their average valuations amounted to some £9,100, and their average net income was £3,150. This, of course, had to cover both the return on their capital and the reward for the farmer's own labour and that of his wife. Even if we allow a 15 per cent. return on capital, which is an arbitrary figure for which I do not claim any particular merit, the net income left to the farmer and his wife for their labour would be £1,800. That does not seem to me to be such a wildly inadequate reward—I have a dairy man who is earning more than that, but that is beside the point—particularly when that farmer


is also getting a substantial return on his investment.
We can take the figures for even smaller full-time farms. Efficient farmers with a dairy herd of 26 cows and average valuations of £4,900 were earning an income of £2,100 on average in 1968–69. If again 15 per cent. is allowed for return on capital, the return for labour is £1,350.
We hear much about grossly inadequate returns which farmers are getting, but efficient farmers can earn a reasonable living. Let me take one more measure. For every £100 of gross output a farmer can earn £32 net income. That is not a bad return. For 1969–70 a general improvement in incomes is forecast. If the hon. Member studies the White Paper he will see that dairy incomes generally are expected to be up as a result of higher milk sales and good prices for fat cows and calves. We do not make special forecasts for the efficient farms, but I have no doubt that if they could improve their average incomes against the general trend in 1968–69 they will improve them still further in 1969–70.
The hon. Member asked me what we think and what is our policy. I think I have said enough to show that the efficient small farmer is not doing too badly, but I do not wish in any way to appear complacent. We all recognise that small farmers face special problems. The hon. Member mentioned some. One which he mentioned is low capitalisation and low turnover. Often the best solution to these problems will lie in greater intensification in order to increase turnover and profits. By and large this is what the efficient farmer has done. One thing which is clear is that our price guarantees cannot be set at levels which will enable the small farmer to get by without making any great effort. This would discourage efficiency. It could lead to over-production and over-production is in no one's interest.
In July, 1962, there was a debate on the small farmer. In that debate I said:
I want to help the small farmer in the only way I think he can be helped—that is to make him big."—[OFFICIAL REPORT, 19th July, 1962, Vol. 663, c. 792.]
In 1965, after we took power, we recognised this problem of the small farmer trying to win a livelihood from insuffi-

cient land. He would find it hard to keep pace with technical advance and find it more and more difficult to maintain a standard of living in keeping with modern times. All this remains true today. As a result, we brought in new measures to counteract this in the Agriculture Act, 1967, to offer these farmers help in three ways: to enlarge their farms where they can get more land; to co-operate with others to get some of the benefits of farming or marketing on a bigger scale; to resettle or retire from farming where they want to give up an unrewarding struggle.
Through these measures we have tried to ensure that small farmers can either continue in business or, if they wish, give up agriculture. I emphasise that no one will be forced to stay in agriculture or to leave it. We have tried to create conditions in which farmers are given the opportunity to go on to obtain some of the economies of scale and through greater efficiency to earn a reasonable living or to retire or direct their abilities and resources into other fields. I think the hon. Member will agree that that is a sound policy for many farmers with farms which will never be viable.
Finally, I must say a few words about what we have done in the 1970 Review, which will also help. The determinations which my right hon. Friend announced last week will benefit this particular type of farmer—the efficient livestock producer and the dairy farmer. It is up to the industry to help itself by taking advantage of the Government's measures in the Review. The determinations are likely to increase the efficient farmer's returns on the 50-cow dairy farms by £470–£480. On the smallest fulltime dairy farms returns should be increased by about £250 a year, or £5 a week. The hon. Gentleman will agree that these are substantial sums. They should mean a considerable increase in the average income of these farmers. It is an increase which we recognise they have earned and which we have therefore made possible in the Review.
The hon. Gentleman has asked me what the future is for this type of farmer. The facts which I have set out show that there is a good future for this efficient size of farm. I do not want to use the word "small", because it covers such a huge bracket of farmers. I am using


the size that the hon. Gentleman referred to. I emphasise the need all the time that such a farmer must watch his efficiency. The industry cannot stand still. What may seem at the moment a large enough farm to be worth working, one which will supply the farmer with a reasonable living, will not be so for ever. That is only too obvious. As the hon. Gentleman probably knows, about 60,000 farms have gone out of production or been amalgamated since the end of the war. This process will continue.
We have put forward a scheme to make it easier for people to go out of farming—to get "redundancy" payments. I think this was the right thing to do. Any man going into farming today must take a long-term view of the situation and appreciate that this might happen. However, where small farmers can produce economically their future is as assured as that of any other farmer.
The hon. Gentleman argued that the small farmer produced more per acre. I know that production per acre is a fairly good criterion, but it is not the only criterion. There can be a tremendous input of capital and effort to secure a certain production per acre. Although the American farmer has more land than we have, his whole criterion is production per man. A combination of the two is the right measure, not just a concentration on production per acre.
I repeat that where small farmers can produce economically, their future is as assured as that of any other farmer,

bearing in mind what I have said about the future. It is absolutely essential for these farmers to make use of the cooperative schemes that we have and to make use of N.A.A.S. If the hon. Gentleman studies the 1968–69 figures and studies carefully what I have said about this size of farm—that is, the 80–110 acre farm with 50 cows, with the farmer doing the job as well as the 25 per cent. at the top—he will see that there is an immediate future for these farmers. They have to watch it very carefully, because there is this progress in amalgamations going on—not only Britain, but in the world as a whole.
This process of amalgamation went on in the years between 1945 and 1950 and also in the years up to 1964, but the Tory Government did not do much to help those concerned. They had a small farmers' scheme, it is true, but they did nothing about redundancy. We think that our scheme has done much to alleviate much of the heartbreak that arises because of farmers having, for various reasons, to go out of business—bad land, bad climate, a whole host of reasons.
The hon. Gentleman can go back to his constituents and tell them the figures I have set out. He can tell them that they can get the figures from the N.A.A.S. I think the hon. Gentleman will agree that the size of farm that he chose has a future.

Question put and agreed to.

Adjourned accordingly at twenty-five minutes past One o'clock.